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DBS Bank India Limited, the wholly-owned subsidiary of Singapore-headquartered DBS Bank Ltd, is exploring establishing a ‘Singapore-Tamil Nadu corridor’ for real-time cross-border remittances, besides attracting NRI deposits from the large Tamil diaspora in the island city-state.
DBS has “worked on a product”, says Bharath Mani, Executive Director and Head-Retail Customer Segment, DBS Bank India. A few other banks in the ecosystem also “want to partner with us”, he adds. Mani told mediapersons in Chennai on Thursday that the bank was examining ways to speed up both commercial and individual remittances “by creating an express highway, with us leading along with other banks”.
Essentially, the initiative will make it easier for people in Singapore to send money to India. Singapore, along with the US and the UK, has emerged as one of the important sources of inward remittances, according to a recent report by Reserve Bank of India (RBI). The three countries accounted for 36 per cent of inward remittances in 2020-21.
“But the work is still in progress,” Mani said.
In July, a business publication reported that at least five Indian banks, including the State Bank of India and ICICI Bank, are in discussions with Singapore’s DBS Bank to start a real-time remittance system using India’s Unified Payments Interface (UPI) as the backbone. The report added that banks are in discussions to start a common remittance platform with the city-state in collaboration with Singapore’s PayNow funds transfer service.
In September 2021, the RBI and the Monetary Authority of Singapore (MAS) initiated the integration of UPI with PayNow to facilitate faster, efficient and transparent cross-border transactions relating to trade, travel and remittances between the two countries.
Singapore has a sizeable Indian population, within which the Tamil ethnic group forms a substantial majority. As per latest data, Indians constitute about 9.1 per cent of the resident population of about 5.5 million.
In November 2020, the RBI allowed the amalgamation of Lakshmi Vilas Bank (LVB) with DBS Bank India Ltd. This gave DBS Bank India a strong foothold in south India through 600 branches across 19 states.
“Of the 450 (LVB) branches, 300 are in Tamil Nadu; Tamil is the second or third main language in Singapore. In fact, there are more direct flights from Singapore to smaller towns of Tamil Nadu than even to Delhi or Mumbai. This shows that there is a strong footprint between, which we want to capture,” Mani said.
According to an RBI report, ‘Headwinds of COVID-19 and India’s Inward Remittance’, Tamil Nadu is the third largest destination state with 9.7 per cent share in total inward remittances in 2020-21. Maharashtra topped with 35.2 per cent, followed by Kerala with 10.2 per cent.
The survey also noted that the share of remittances from the Gulf Cooperation Council (GCC) region has declined from more than 50 per cent in 2016-17 to about 30 per cent in 2020-21 amid a steady migration of skilled workers to advanced economies, particularly the US, the UK and Singapore.
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