The Hindu Business Line : IndusInd plans parabanking, wealth services by fiscal end

Talking to presspersons after the bank’s annual general meeting, Mr Bhaskar Ghose, Managing Director and Chief Executive Officer, IndusInd Bank, said a subsidiary was necessary as these activities could not be carried out by the bank.

The bank will also be looking at wealth management. Mr Bhaskar said it has already applied for the Reserve Bank of India’s permission to set up a subsidiary for wealth management services, which require a capital of Rs 50 lakh to Rs five crore.

It may be recalled that the bank tied up with financial services provider Religare and noted that it would act as an intermediate arrangement till the new subsidiary was formed.

Currently, its lines of business include corporate banking, retail banking, treasury and foreign exchange, investment banking, capital markets, Non-Resident Indian (NRI)/High Networth Individual (HNI) banking, and (through a subsidiary) information technology.

Insurance plan

Mr Bhaskar said it is also planning to enter life insurance business, most likely in partnership with a foreign insurance player. It already has a bancassurance tie-up with Aviva Life Insurance.

He said the bank is planning to float a subsidiary later this fiscal to enter the insurance broking business. He noted that it will enable them to sell the products of all insurance companies with a token capital outlay between Rs five to ten lakh.

Capital needs

Mr Bhaskar said the bank hopes to fill the gap between its authorised capital (Rs 400 crore) and paid-up capital (Rs 320 crore) over the next two years.

He added that the bank is also planning to raise tier II capital of Rs 250 crore to Rs 350 crore later this fiscal and tier I capital in the first half of the next fiscal.

Mr Bhaskar, commenting on the GDR issue, noted that it has successfully completed its maiden GDR issue towards the end of 2006-07 which had enhanced the networth level of the bank to over Rs 1,000 crore.

He also noted that the bank’s balance sheet size was above Rs 20,000 crore and added that the board of directors recommended a dividend of six per cent for the year ended March 2007.

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