Introduction & About

- HDFC Bank Ltd., the flagship private sector bank of India, is seeking to open its maiden branch in Singapore.

- Singapore is being seen as the next strategic move by the bank after its hefty merger with the Housing Development Finance Corporation during the previous year.

Why in News?

- HDFC Bank's move to expand its global footprints began with a licence application submitted to the Monetary Authority of Singapore (MAS).

- The ambiguity surrounding the details of this application, which includes the type of licence being sought, has piqued interest among those tracking the banking sector's developments.

The Bank's Vision for the Overseas Market

- The bank intends to exploit the potential of the banking sector overseas by targeting the Indian diaspora in Singapore.

- Their marketed scheme includes the promotion of savings and term deposits, and cross-selling of a variety of products such as mortgages.

Aiming to Serve Indian Diaspora

- Having a notable non-residential Indian diaspora of approximately 650,000, Singapore comes off as an attractive target for HDFC's expansion.

- The bank sees this population as potential clients and aims to cater to them with tailor-made financial products and services.

Anticipating MAS Response

- HDFC Bank's application is still under consideration, with neither approval nor comments issued by MAS yet.

- Currently not licensed or regulated by MAS, HDFC Bank can merely provide advice services for home loans relating to property purchases in India.

Types of Banking Licences in Singapore

- Three types of banking licences are issued in Singapore- Full Banks, Qualifying Full Banks, and Wholesale Banks, each subject to different levels of operation restriction.

- HDFC Bank's licence application shows its readiness to wade through these regulatory nuances to establish a comprehensive banking presence.

HDFC's Global Presence

- HDFC, in addition to planning for Singapore, already marks its presence in other leading financial centres such as London, Hong Kong, and Bahrain.

- This international advent is a cog in the wheel of HDFC's masterplan, which is to diversify its geographical reach and penetrate international markets.

GK Update:

- HDFC Bank Ltd., established in 1994, is a leading banking and financial services company based in India. It is the country's largest private sector lender by assets, offering a wide range of financial products and services.

- Singapore, a global hub for finance, technology, and trade, is renowned for its robust economic infrastructure, strategic location, and business-friendly environment.

- MAS is Singapore's central bank and financial regulatory authority. Controlling all the financial institutions in Singapore, its mission is to promote sustained non-inflationary economic growth and a sound and progressive financial centre.

- The term "Indian diaspora" refers to Indians settled overseas, their descendants, or people with Indian roots.

- The bank’s global footprint expansion aligns with India's 'Look East' policy, aimed at improving economic and diplomatic relations with its eastern neighbours and beyond.