HDFC Bank seeks Singapore bank license to grow overseas after landmark merger

HDFC Bank, India's largest private sector lender, is seeking approval for a banking license in Singapore. The bank aims to tap into the Indian diaspora in Singapore for savings and term deposits, as well as cross-sell products like mortgages. HDFC Bank already has a presence in London, Hong Kong, and Bahrain. With a customer base of 93 million, the bank is expanding its reach overseas after a merger with Housing Development Finance Corp. last year.

The fast-growing consuming class in India is witnessing the birth of a digital lending powerhouse in the form of a homegrown Ant Group, being set up by the countrys wealthiest tycoon. These disruptions are the result of the bigger consuming class that finance has helped create, but their sustainability is yet to be tested. Among the potential issues creating instability in the banking sector is the skewered nature of individual savings skewed towards the top earners, heaping pressure on cash-strapped lenders. Higher interest rates mean paying more to lenders for mortgages and other consumer credit.

Large reliance of Indian banks on local deposits cushions them as global peers are facing potential contagion from the woes emanating from Silicon Valley Bank fallout, Macquarie Group told Bloomberg. Friday's dramatic failure of the SVB, which focuses on tech startups, was the biggest since the 2008 financial crisis. Moreover, state regulators closed New York-based Signature Bank on Sunday, making it the third largest failure in U.S. banking history.

Plan to raise number of banks that can receive remittances from Singapore to 14 from 6

The global banking crisis is expected to bring in regulatory measures across the sector after troubles at Credit Suisse and failures in some US banks. However, this will not have any major impact on Indian banks. Domestic lenders balance sheets are well protected.

In one corner of the Street, a select few are debating about “What will happen to HDFC Bank?” Being a widely held bank in the institutional category of investors, this was bound to happen. Let them debate as many other private & public sector banks are moving on their path. One should keep an eye on them besides the much-talked-about HDFC Bank. For private sector banks, the majority of them have seen recovery as some kind of rational trade is still taking place even in the private banking space. For PSU banks, after a short few days of volatility movement, they have been able to recover faster, indicating continued interest. Probably at another time, private banks may be getting classified as “Private Banks - Ex HDFC bank”. Yes, there will be higher volatility in the short term, but if induced by volatility if one is taking any sell decision in the private banking space, one should remember that the lenders in question have created wealth in the long term.