The Hindu Business Line : Kolkatans switching over to contemporary banking

There are estimates suggesting that private banking customers in the city are increasing by the day, many of them preferring to park more resources with their bankers.

MS NAINA LAL KIDWAI

Kolkata , Nov. 26

If you had thought that Kolkata believes only in old-fashioned banking, this may be time for you to re-think. The city's well-heeled loves to bank in style, complete with all the trappings that contemporary banking offers them.

Ask HSBC, the bank that has had close links with the city for a very long time, and you will know why this is so. Kolkata has its share — as some say, an increasing portion of it — of the country's wealth, a situation that is now getting seriously reflected in the way its denizens are making use of private banking services.

Insurance Penetration

But first, a close look at the State of the country's wealthy, as portrayed by Ms Naina Lal Kidwai, Group GM and Country Head, India, HSBC. There are, she notes, about 83,000 super-rich Indians today, each with financial assets of over $1 million, a figure that is expected to triple by 2010.

The factors that support the case are well-told too. An increasing community of the so-called young affluents, all of them part of that sizeable set of people who are 25 or younger. This is, as the bank sees it, in the backdrop of consumerism, a huge expansion of retail credit, low insurance penetration and the like.

HSBC, which has a distribution tie-up with Tata AIG Insurance, sees this low penetration as an opportunity for India. It also sees emerging cities like Kolkata come up well on this front. Insurance penetration, for statistics chasers, is at 2.9 per cent (as a percentage of GDP). Incidentally, there is a low mortgage to GDP ratio at 3 per cent. In comparison, this is 9 per cent in Thailand, with countries like Singapore scoring far higher on this count.

Retail credit, Ms Kidwai adds, is estimated to go up by 30 per cent year-on-year, while the newly formed credit bureau will gradually make its presence felt in terms of expanding the organised sector.

Reports

Where is Kolkata fitting in? There are estimates suggesting that private banking customers in the city are increasing by the day, many of them preferring to park more resources with their bankers. The latter are reporting a greater share of clients' surpluses, thanks to an expanding array of savings and investment products. Clients' relationships with bankers are blooming too, HSBC sources maintain.

At a more retail level, reports from Kolkata suggest a greater number of active credit cards, more applications for home loans and a far greater demand for insurance and mutual funds than before.

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