Even as a number of foreign banks have re-calibrated their strategies for India, HSBC India sees “endless opportunities” in the country, said Hitendra Dave, General Manager and CEO, HSBC India. While converting to a wholly owned subsidiary is not in its plans, it would consider inorganic plans for customer acquisition, Dave told BusinessLine in an interview. Excerpts:

Q

A number of foreign banks have been re-calibrating their opportunities in India. What about HSBC? 

While every bank has followed their own strategy, I can only say that we see endless opportunity in India. We want to be a much more Indian bank in terms of the type of customers we serve and the kind of solutions and services we provide. 

Q

HSBC AMC recently acquired L&T MF. Would you look at more such acquisitions?

India is, at this juncture, an absolute top priority for the group. The group has seen the upside potential of India. We are open to evaluating any opportunity that makes sense, whether that is in wealth, mutual funds, insurance, or anything else. We, in India, are customer acquisitive. If that customer acquisition can be accelerated through inorganic plans, we are happy to do that. 

Q

Will you consider converting to a wholly owned subsidiary in India?

We will keep evaluating the pros and cons. At this juncture, it’s not something that is on our immediate list of things to do. We want to be a much more Indian bank. If the regulator makes it mandatory, we will abide by the regulator. Sans that we will be guided by the pros and cons.

Q

What are your expectations from the monetary policy?

It would be universally expected that there would be a rate hike. I think the issue is the extent. My own hope is that whatever is considered the neutral rate in the given circumstances, we need to add 25 basis points as insurance and reach that goal within calendar 2022. This would give the central bank time to pause and would also be better in the current global uncertainty. In the base case, my own guess is that the rate would be at six per cent tops at the end of this rate cycle barring worsening of the external environment. The market has done a lot of tightening and is already there.

Q

Do you see a recovery in credit demand?

The current bout of credit demand that we are experiencing is partly because of booming exports, a boom in certain pockets of domestic demand and partly due to commodity prices. There is also a certain amount of pent-up demand. Also, the work being done by the Reserve Bank of India, the government and the payment infrastructure bodies is making available credit to people who have thus far been deprived. Over the next five to 10 years, there is a massive opportunity for credit to MSMEs, and that will have profound implications for growth and employment.

Q

Are you cautious about any segments?

No. I think there are good customers and not so good borrowers, sector agnostic. As long as we follow basic disciplines of lending and certain internal criteria on the kind of customers we onboard, we don’t have any no-go sectors. There are some sectors we avoid because our understanding is weak, although there may be opportunities. In terms of lending, we look for corporate governance, transparency, and openness in the conversations with us, and the balance depends on the database. Our strength is FEMA, FDI, and regulatory reporting.

Q

How is the Russia-Ukraine war impacting your clients?

Obviously, with oil prices going higher, input prices for everybody have increased. The impact of war has also been felt through the confidence channel. It cannot be denied that the business mood has gotten a little soured. 

Q

What is the bank’s digital strategy?

Digital is a top focus for a bank like ours, which wants to double, triple or quadruple our customer base, meaningfully expand our balance sheet and become a preferred transaction banking bank. This is an area where we have a complete mandate from our global board to make sure there are propositions that are aligned to the market. We will grow only using technology, digital and data at the front end, and at the back, there will be artificial intelligence.

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