‘Recast of retail book in 6-8 months,’ says Standard Chartered Bank’s P D Singh

Many foreign banks, including Standard Chartered, have scaled back retail lending and credit card businesses in India. Why is this change in strategy?

I think it is about being relevant to your customer segment. Can you be everything to everyone? You cannot. This is a highly competitive market. The challenge is not delinquencies but achieving the scale required to make the business sustainably profitable.

Some foreign banks have chosen to focus on narrower customer segments where they can build a stronger proposition. Our strategy is advisory-led, focused on cross-border banking, bespoke services and deeper customer engagement, rather than competing in the highly competitive mass retail segment. The focus remains on doing a stellar job for the key customers in the segments we choose to serve.

What is the next phase of your retail strategy?

We are about three-fourths through our retail transformation and expect it to be largely complete in the next six to eight months. Our focus will remain on wealth and affluent banking, supported by a full suite of products for existing clients.

Does that mean you are no longer targeting standalone credit card or personal loan customers?

We recently launched the Beyond credit card, but it is only for existing relationship customers. We are not pursuing single-product customers.

Will that slow customer acquisition?

Yes, maybe. We already serve around 1.3 million customers, and our priority is to remain relevant to them and deepen those relationships rather than simply add more customers.

Where do you see the key opportunities?

Our opportunities lie in serving customers across the affluent and wealth segments and expanding our SME franchise. The priority is not just to grow this business but to gain more market share.

What are your priorities on the corporate banking side, and how do you see the pipeline evolving?

Project finance remains a key focus. We are among the largest foreign banks in India’s infrastructure financing market, with a strong pipeline, particularly in renewables, transmission and EV-related infrastructure. Project finance accounts for around 10-12% of our India loan book.

We are also seeing encouraging signs of a revival in manufacturing and private capex, driven by the Make in India initiative, global supply chain diversification and government incentives. Our corporate pipeline is around 15% larger than it was a year ago, and we expect a significant portion of it to materialise.

Do you expect your loan book mix to change as wealth becomes a bigger focus?

We believe the current balance between retail and wholesale lending is close to optimal, and both businesses are growing well. On the corporate side, our portfolio includes trade finance, working capital, M&A financing and foreign exchange services.

What is your estimate of foreign capital inflows into India following the recent RBI measures?

Putting a number on FCNR(B) inflows is not really the objective. We are very encouraged by the measures announced by the RBI. The aim is to ensure that not only FCNR(B), but all channels, contribute to greater foreign currency inflows into the country. The more, the better.

Do you think banks are being too optimistic about expected inflows through this route?

I do not think so. There is a lot of enthusiasm as well as demand. On FCNR(B) deposits, we have already rolled out products, interest rates and structures across our key global Indian hubs, including Hong Kong, Singapore, the UAE and Jersey.

We have published rates for three-, four- and five-year deposits, which are in the range of 5.5-6%. They are slightly lower than Indian banks, but pricing also depends on how much each bank can absorb and deploy in India.

How many countries will this scheme cover for Standard Chartered?

We expect the largest flows to come through our four global Indian centres — Hong Kong, Singapore, the UAE and Jersey — though customers from other markets can also access these centres.

Beyond FCNR(B) deposits, we are also seeing interest from Indian banks and PSUs in raising foreign currency. While some banks are waiting for better pricing in the dollar bond market, there is a healthy pipeline. Our role is to structure these transactions and bring together larger pools of capital for clients.

How large is this opportunity for Standard Chartered?

It is a significant opportunity, potentially running into multiple billions of dollars. We also see strong demand for dollar funding from Indian banks. As a large correspondent bank, our strength lies in arranging sizeable lines of credit by bringing together funding from multiple market participants alongside our own capital.

Even with narrower interest rate differentials, do you expect strong inflows? Is raising funds only half the challenge, with deployment being the other?

Yes, we expect money to come in. The objective of these measures is not just commercial returns for banks but attracting foreign currency into the country when it is needed.

That said, raising funds is only one part of the equation. Banks also need to deploy capital efficiently, which is why there may be hesitation in raising it at very high prices.

At what stage is your credit card deal with Federal Bank?

Federal Bank is in the due diligence phase. They had indicated a timeline of October. In the worst case, I expect it to be completed by the end of the year.

Did the West Asia crisis have any impact on your India business or asset quality?

India withstood these shocks better than many other markets. While some customers faced supply chain challenges, we supported them through funding and by helping them reconfigure supply chains, which strengthened relationships.

There were second- and third-order effects beyond the immediate disruption, but we worked closely with affected clients. Encouragingly, we have not seen any material credit concerns or deterioration in asset quality.

How has the bank’s GIFT City business evolved?

We were the first foreign bank to establish a presence in GIFT City and remain among the largest. We have completed several first-of-their-kind transactions, including aircraft financing, securitisation, home loan financing and microfinance refinancing.

GIFT City offers tax efficiencies, lower compliance costs and a simpler regulatory framework. Together with IFSCA and CCIL, we have also helped establish foreign currency clearing, enabling banks to clear dollar transactions locally while facilitating cross-border payments through a single account.

With the rise of AI and fintech players, how is the competitive landscape changing?

At Standard Chartered, we are investing in new technologies globally. We are among the first banks approved by the Hong Kong Monetary Authority to issue wholesale stablecoins, and in several markets we offer digital asset services within the regulatory framework.

We also leverage our global expertise in areas such as cybersecurity, which benefits our operations in India.

What are the use cases for AI at Standard Chartered?

We are using AI extensively to improve productivity, with tools such as Copilot rolled out across the organisation. AI is primarily being used to automate repetitive and routine tasks.

In India, however, we are growing rapidly and have not announced any workforce reduction plans. At this stage, AI is being used as a productivity tool.