Russia’s majority state-owned Sberbank is preparing a major expansion in India and plans to seek regulatory approval within three years to convert its existing branches into a wholly owned subsidiary, CEO Herman Gref said.
The lender, which is the key intermediary in rupee-ruble settlements and facilitates nearly 65–70% of Indian exports to Russia, aims to transform into a full-fledged bank in India over the next decade. With Russia maintaining a trade surplus in billions of US dollars in rupee, the bank’s expansion will help the Russian investors deploy the money gainfully in India.
Sberbank’s expansion plans
Sberbank currently operates two branches but plans to add ten more as bilateral trade diversifies and investment flows rise. Gref said the bank is strengthening both its B2B and B2C presence, introducing advanced technologies and gradually entering retail banking. “We will start retail operations also, but we don’t want to jump… in 10 years, we will become a normal bank,” he noted.
Russians to invest in India’s Nifty50
The bank is also building financial links for Russian investors, having launched an instrument allowing retail investors in Russia to invest in India’s Nifty50 index. Sberbank further plans to facilitate Russian investment in Indian government securities and has secured a special licence to facilitate gold exports to India.
Rupee-ruble transactions have seen remarkable improvement, with 80% now completed in under 10 minutes compared with weeks or months earlier. The lender will invest several million dollars to expand its India operations, including a proposed IT centre in Hyderabad apart from the existing one at Bangalore.
Gref added that Sberbank is exploring collaboration to open engineering schools in 20 Indian cities.