Tag: DBS Bank

DBS Bank India introduces an industry-first digital & paperless trade financing solution, BFSI News, ET BFSI

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Mumbai (Maharashtra) [India], November 30 : In the current environment, there is a need to drive digitised trade for Corporate customers to reduce processing turnaround time and drive businesses efficiently. In light of the latent need, DBS India has introduced a paperless proposition for the financing of domestic invoices by buyers and sellers. The bank now digitally validates the e-Way Bill (i.e. proof of movement of goods) for the purpose of establishing the genuineness of underlying trade transactions. The adoption of this approach has enabled DBS to process transactions quicker without the need to obtain underlying physical documents.

The bank has also executed its first paperless domestic trade financing transaction with Lincon Polymers Pvt. Ltd., marking a significant milestone in the bank’s digital transformation journey.

With this solution, the bank will eliminate the need for cumbersome documentation, making the entire financing journey paperless and seamless. Customers can share details of their transactions through IDEAL (DBS’ digital banking platform that enables companies to initiate, monitor, and secure business transactions). The data is then validated against the Government-enabled Eway bill portal via GSTN after receiving a one-time authentication from the customer. The bank has partnered with Rezofin, an online invoice financing platform for this process.

Following the amalgamation of LVB with DBS Bank India, the bank is well-positioned to offer this solution to the country’s large SME base, which has traditionally grappled with significant documentation for their financing requirements.

Divyesh Dalal, MD & Head – Global Transaction Services, DBS Bank India, said, “We have been leveraging our digital capabilities to design intelligent solutions that benefit time-strapped enterprise owners. Using the eWay bill verification, we’ve helped clients to reduce the time taken for financing an invoice. The solution is a significant step towards making the underlying trade finance process truly digital and paperless, which has historically been document-intensive.”

Commenting on the transaction, CA Anish Shah, Finance Manager from Lincon Polymers Pvt. Ltd., said, “The domestic financing using E-waybill verification is a unique proposition by the bank. By being digital and paperless, the solution enables us to raise financing requests seamlessly. It has eliminated the need to send physical documents, which needed a dedicated resource to manage transactions. We are happy to have partnered with DBS as they understand our requirements and have extended a solution that enhances efficiency.”

DBS has been proactive in identifying customer needs and creating customised banking solutions for large enterprises and small and medium businesses that meet their end-to-end requirement. Last year, DBS introduced a completely digital and innovative payments solution in partnership with Transport Corporation of India Limited (TCIL). The partnership empowered truck drivers by enabling real-time payments through the DBS RAPID solution. Recently, the bank partnered with ODeX to introduce ODeX Pay Later Solutions powered by DBS- a hassle-free credit solution for freight forwarders. DBS has also launched real-time online tracking for cross-border collections for businesses in India in partnership with SWIFT Global Payments Innovation (gpi).



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Singapore’s DBS suffers second day of online banking disruption, BFSI News, ET BFSI

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SINGAPORE -DBS Group Holdings Ltd, Southeast Asia’s largest bank, is facing disruptions in its online banking services for the second consecutive day on Wednesday after service outages began on Tuesday morning, leading to complaints from customers.

“Services were restored early this morning. Unfortunately yesterday’s digital banking issue has recurred and this has affected our services,” Singapore-based DBS said on its Facebook page on Wednesday.

The disruption in its online services, including a payments app, is the biggest faced by DBS in about a decade.

Singapore is the biggest retail and wealth management market for DBS, which also has operations in places including Hong Kong, Indonesia and India.

DBS did not elaborate on the cause of the disruption.

DBS’ Facebook post attracted more than 2,000 comments, with users saying they were unable to log in onto their digital bank accounts, while some asked for compensation.

“How long is this going to take to get it fully restored and running? This is incredibly frustrating when I need to have access to my funds,” said user Nicole Lou.



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DBS Bank completes active loan switch ahead of LIBOR transition, BFSI News, ET BFSI

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DBS Bank India has announced active transitioning of an existing loan and derivative to new reference rates. This is part of the bank’s benchmark transition plan to adopt new Alternative Reference Rates (ARR) as Interbank Offered Rates (IBORs) are phased out.

DBS Bank has transitioned some of the existing loan and derivative contracts with two companies – Power Finance Corporation Ltd and REC Ltd – to the new reference rates. Existing contracts were benchmarked to Swap Offer Rate (SOR), and post this transition, all loans and derivatives have now moved to Singapore Overnight Rate Average (SORA), the new risk-free rate.

As legacy interest rate benchmarks SOR and Singapore Interbank Offered Rate (SIBOR) are systematically phasing out, SORA is the recommended SGD interest rate benchmark, which is expected to replace them. Banks across countries, including India, are also moving towards ARR benchmarks equivalent to SORA.

In July 2021, RBI issued an advisory to banks and financial institutions to cease entering into new financial contracts referencing London Interbank Offered Rate (LIBOR). Since the advisory, banks have executed transactions linked to the Secured Overnight Financing Rate (SOFR) benchmark.



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Buying Citi assets can be a game-changer for Kotak, IndusInd faces constraints, BFSI News, ET BFSI

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The retail and credit card business put on the block by Citibank India are best fit for Kotak Mahindra Bank and DBS Bank, while for HDFC Bank it is still a good asset though not a game-changer, according to CLSA.

The brokerage house had estimated the value of Citi‘s business in India at $2-2.5 billion.

HDFC Bank, Kotak Mahindra Bank, Axis Bank, IndusInd Bank and DBS Bank have emerged as the top five contenders to take over Citi India’s retail business that includes, credit cards, mortgages, wealth management and deposits. The race will be narrowed down to three, with whom Citi would negotiate a higher value.

How they stack up

While IndusInd Bank has the size and valuation constraints to acquire such an asset, the operations can be a game changer for Kotak Mahindra Bank because it can add 20% to the bank’s current retail loans, it said. “For Kotak Bank, the business adds 20% to its current retail book and increases its card segment by 3x (times),” the brokerage said in a note. “It is also complementary to its affluent customer base and Kotak Bank’s premium valuation will aid it in a purchase.”

It said Citibank’s affluent retail business also fits well with DBS Bank India’s premium offerings and banking relationships. DBS Bank does not have a credit card business in India.

For HDFC Bank, the acquisition won’t be a game changer as it is only nearly 6% of the lender’s total book, it said, while for Axis it will be a valuable acquisition, but valuations would be constrained, it said.

What’s on offer?
Citi’s total assets In India at the end of FY20, including credit extended to Indian institutional clients from offshore Citi entities, stood at Rs 2.99 crore.

The consumer banking business, which includes cards and loans against property, would be around Rs 32,000 crore. It also has a huge amount of savings accounts built over the last few years, which has a lucrative liability book and also credit cards, in which it was the largest among foreign banks in India.

The bank also had Rs 27,911 crore of loans to agriculture, affordable housing renewable energy and micro, small and medium enterprises (MSMEs). Of this, Rs 4,975 crore was to weaker sections, as part of Citi India’s priority sector lending obligations, results released last year showed.

Citi Bank has 2.8 million retail customers, 1.2 million bank accounts and nearly 2.6 million credit cards as of June.

Citi’s consumer business contributes about a third to the overall India business in terms of profitability, while total India business contributes 1.5% of profits to the global book. Overall, Citibank’s India unit had a market share of advances and deposits of 0.6% and 1.1%, respectively.

Citi credit cards
Buying Citi assets can be a game-changer for Kotak, IndusInd faces constraints

Citi started retail operations in India in 1985 and was among the pioneers of credit cards in the country. However, its share of credit cards has dropped from 13% to 6% now. Despite being the sixth-largest player in the space, Citi has the highest average spend on its card touching close to 2 lakh per card. The average spends per card for Citi is 1.4 times higher than the industry average, making it a profitable business for the bank in India. The other four major players have had nearly the same steady growth in spend per card at 11-12%.

Citibank’s outstanding credit cards as of February stood at 2.65 million, the largest among foreign banks in India, ahead of 1.46 million by Standard Chartered and 1.56 million by Amex. Citi India had 2.9 million retail customers with 1.2 million bank accounts as of March 2020.

At the end of March 2020, Citibank served 2.9 million retail customers with 1.2 million bank accounts and 2.2 million credit card accounts.



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DBS Bank and Temasek tie up to roll out debt finance platform, BFSI News, ET BFSI

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DBS Bank has partnered with Temasek to jointly launch a US $500 million growth stage debt financing platform, called EvolutionX Debt Capital (“EvolutionX”). Headquartered in Singapore, EvolutionX will provide non-dilutive financing to growth stage technology-enabled companies across Asia, with a focus on China, India, and Southeast Asia.

This partnership also serves as a natural extension and segue to both DBS’ and Temasek’s existing early-stage debt initiatives and investment activities, bolstering the strength of the extended network and ecosystem through synergies fostered. evolution combines Temasek’s investment expertise and DBS’ global banking networks to leverage and further catalyse the fast growing technology ecosystem in Asia.

The platform will be led by Joint Interim CEOs Amit Sinha, Group Head of Telecoms, Media and Technology, Institutional Banking Group at DBS, and Aftab Mathur, Director, Investment (Innovation) at Temasek, before a full-time CEO is appointed in the next few months.

Tan Su Shan, Group Head of Institutional Banking, DBS said, “The investment in EvolutionX provides an opportunity for us to play an integral role in nurturing and financing the growth of Asia’s future unicorns, while forging partnerships and ecosystem opportunities with these high-growth technology-enabled companies. As a purpose-driven bank, we believe in investing in solutions that democratise financing access to companies of all sizes and stages of development to give them the best opportunity to achieve their endeavours.”

“Growth debt is fast emerging as an alternative source of financing for high-growth technology companies that traditionally only raised equity as a source of capital. Apart from helping founder entrepreneurs avoid dilution of share equity in the company’s initial stages of development, growth debt also serves as a complementary tool to tide these companies, which are often cash strapped, through unexpected market and economic headwinds by extending their cash runway.”

Rohit Sipahimalani, Chief Investment Strategist, Temasek said, “Technology and digitisation will have a pervasive impact across many sectors, and will continue to transform our economies and communities. Temasek believes in the purposeful use of our capital to create and catalyse solutions for gaps we see today, to stimulate innovation and growth for long term, sustainable value.”

“We’re therefore pleased to partner with DBS to provide a meaningful alternative for technology-focused growth companies in Asia that may face debt funding needs between the venture debt and late stage debt financing phases. With EvolutionX, we can help provide companies and entrepreneurs the support they need as they continue to scale and expand.”



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DBS Bank India FY’21 net profit surges to ₹312 crore

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DBS Bank India’s net profit surged by 181 per cent in 2020-21 to ₹312 crore from ₹111 crore in the fiscal year 2019-20.

As of November 27, 2020, Lakshmi Vilas Bank (LVB) was amalgamated with DBS Bank India Ltd (DBIL) and the results include LVB’s performance since that date.

Net revenue for DBIL grew by 85 per cent to ₹2,673 crore in 2020-21 from ₹1,444 crore in 2019-20. The net revenue for last fiscal includes ₹134 crore from LVB.

Total deposits increased by 44 per cent to ₹51,501 crore, which includes ₹18,823 crore from LVB.

Savings account balances grew by about 207 per cent, and current account balances grew by about 98 per cent year on year, including the growth on account of the amalgamation.

NPA

Overall CASA ratio improved to 31 per cent from 19 per cent.

Gross non performing assets (NPA) remained moderate at 1.83 per cent for DBIL excluding the LVB portfolio.

While gross NPA deteriorated to 12.93 per cent after the amalgamation of LVB, the net NPA for the bank on a combined basis, stands at 2.83 per cent given 84 per cent provision coverage.

“After the amalgamation, the bank’s primary focus has been on welcoming the employees and customers of LVB into the DBS family, unifying the LVB and DBS workforces and re-building the LVB business,” DBIL said in a statement.

Platforms integration

The integration of operating platforms and branches is currently underway.

“The steady growth in LVB current and savings account balances as well as in the gold loans portfolio in 2021 is an early indicator of the success of the current strategy,” it further said.

Surojit Shome, Managing Director and CEO, DBIL said there has been considerable progress with the integration of LVB since the amalgamation in November 2020 even with the dislocations due to the second wave of the pandemic.

“While, as expected, there has been an immediate impact on our financial results due to the high Net NPAs and operating losses at LVB, we are confident of realising the long-term prospects of the combined franchise,” he said, adding that in the erstwhile LVB operations, DBIL has already been able to revitalise the gold loans business and grow deposits.

“Our immediate priority is to integrate the operating systems and processes so that we can deliver best-in-class solutions to a wider customer franchise,” he further said.

DBIL’s capital adequacy ratio stood at 15.13 per cent, with CET1 at 12.34 per cent. During the year, DBS Bank infused ₹2,500 crore into DBIL to support the amalgamation.

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Banks should bring social media experience to customers, says Taimur Baig of DBS Bank, BFSI News, ET BFSI

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Banks and financial institutions must take a leaf out of social media companies’ book to provide digital and seamless experience beyond the core banking facilities, said Taimur Baig, MD & Chief Economist, DBS Bank Singapore.

“It is no longer about bank branch, site, doing certain transactions is not enough. Customer demand and want more. banks can introduce robo-advisory, that does not require face to face interaction and is a simple model to use,” Baig said while delivering the keynote address at the ETBSI Virtual Summit, Baig spoke about the four pillars which can hold banks and the financial sector in a good state.

Taimur Baig, Chief Economist and MD, DBS Bank (Singapore)

Listing augmented, open, cognitive and automation banking as the four pillars that can hold banks in a good state, he said, “New ways of interacting with customers will provide value to customers and bring them joy, hence they will continue to come back.”

Augmented banking

Under augmented banking, banks can introduce robo-advisory, that does not require face to face interaction and is a simple model to use.

“They can eliminate handmade signatures and enable biometric signatures. They can enable digital onboarding allowing customers to upload PDFS and do digitally and seamlessly. They can provide intelligence services like newsletters, articles through apps, websites etc,” he said.

Open banking

Open Banking is allowing banks within the banking system as well as the broader financial sector to come with pipes, so that the information, payment instructions can move freely and cheaply across the financial sector. “Combine the services you offer as a bank with other vendors, banks. For example, bank tying up with food service, taxi service company as a result payment services, information can move freely providing value and convenience to customers which translates into higher revenues for banks,” he said.
Citing marketplace for api, credit, reserve management, cross border payments as other areas for open banking, he said, “Having marketplaces where other participants can come and work as a peer providing better services to customers, institutional customers across retail and wholesale will be critical.” No discussion of open banking is not complete is without blockchain.

Underscoring the importance of blockchain in open banking, Baig said, “Normally when we have cross border transactions, we have many parties, companies, Banks, many payments companies in the middle, all of those can be brought into transparent context.”

Cognitive banking

Cognitive banking as the name suggests is about the intelligent ways of coming up with customer solutions for clients. “It is like the way when you surf tTik Tok, Facebook or Instagram. The algorithm of particular apps will know about your usage history and will provide you with set of content made just for you,” he said.

“Why cannot we do it as banks. We have a lot of data with us. Why don’t we make use of these data and develop tailor-made solutions for them?Cannot we create a recommendation engine for our clients based on that, Baig asked.

Automated banking

Automated banking is about automating bank’s services such as organisational resources, fraud analysis, anti-money laundering aml-cft type work, AI, audit tracing, loans approval. “All of those things should not be subject to many days of process, many human interaction, lot of errors in decision making. This should be a part of seamless process done automatically, very very cheaply but using data, using cutting edge machine learning and AI,” he said.

Learnings from the pandemic

Fifteen months into the pandemic we could confidently say that banks all over the world have held themselves well, Baig said. “The Indian bank system has had a tough time in last 5-6 years in terms of bad loans, they themselves did not fall into a significantly deeper hole because of pandemic happening last year or so, he said.

Even though it looks very bleak right now, this will pass, he said.

“We know better it is also about the economic dimension. We know how to help people in need, we know how to bring assistance to them, and it was fairly successful. We know how to keep factories growing, agriculture growing even if there is an outbreak. Because given last one year experience we know how to keep this activity going even if the statistics show alarming numbers of outbreak.”

It will be tough going this quarter and perhaps also next quarter, but this time there are certain factors different from the last time.

The call for the wholesale downfall is premature, downfall risk has increased but still there are know-how protocols which will allow to rise through this storm, he said.

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DBS in ‘advanced talks’ to buy Citi’s consumer banking business in India

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Citi, which recently announced plans to exit consumer banking operations in 13 markets, is understood to be in talks with a number of foreign lenders, including DBS Bank, for its India business.

Sources close to the development said Citi is keen to exit its India consumer banking operations soon and would like to sell the entire set-up in one go.

“Talks with DBS Bank are at an advanced stage and they are keen to take up the entire consumer banking operation,” said a person familiar with the development.

Citi declined to comment to an email query sent by BusinessLine on the issue.

“At this juncture, the details are still unclear. However, we have always been open to exploring sensible bolt-on opportunities in markets where we have a consumer banking franchise (India, Indonesia, China and Taiwan) and where we can overlay our digital capabilities to serve our customers better,” a DBS spokesperson said in response to an email query by BusinessLine.

Separately, many banks are understood to be keen on Citi’s credit card business in India, which had 26.4 lakh customers as of February 2020.

Why DBS?

DBS Bank India Limited is first among large foreign banks to start operating as a wholly-owned, locally incorporated subsidiary in India and has been keen on expanding its operations in the country.

In November, Lakshmi Vilas Bank was also amalgamated with DBS Bank India, giving it access to a large customer base.

However, it could take at least six months for any transaction to be finalised, according to analysts.

According to a report by JM Financial, Citi’s Indian consumer business has a sizeable presence, with retail loans totalling about ₹3,200 crore.

“It needs to be seen whether all these businesses will be sold together or piecemeal. Also, payment consideration, in cash vs stock, will be a critical determinant to decide the eventual buyer. Since Citi functions in India through a “branch route” versus a wholly-owned subsidiary (like DBS Bank), the transaction will mostly be asset sale. In our view, the process could take 6-12 months until a final winner emerges,” it said.

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DBS, Kotak Bank, IDFC First may be frontrunners to buy Citi’s retail business, BFSI News, ET BFSI

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Citibank could sell its retail business in parts or as a whole with suitors ranging from local new and established lenders like Kotak Mahindra, IDFC First or even foreign banks like DBS Bank.

DBS Bank is considered one of the potential buyers of these businesses given its deep pockets and ambitions to expand in India. In November last year, the Singaporean lender completed the first of its kind RBI directed acquisition of a distressed lender taking control of Chennai based Lakshmi Vilas Bank (LVB).

DBS India has already infused more than $1 billion into India in its relatively new existence in the country and though LVB gives its wider access to South India, it may look at Citi‘s credit card portfolio to kick start that business in India. DBS does not offer credit cards in the country currently.

Kotak Mahindra Bank, which was said to be exploring an acquisition of IndusInd Bank and refused the offer for Yes Bank, could be interested in the Citi Bank assets

What’s on offer?

The consumer banking business, which includes cards and loans against property, would be around Rs 32,000 crore. It also has a huge amount of savings accounts built over the last few years, which has a lucrative liability book and also credit cards, which they were the largest among foreign banks in India.

The bank also had Rs 27,911 crore of loans to agriculture, affordable housing renewable energy and micro, small and medium enterprises (MSMEs). Of this, Rs 4,975 crore was to weaker sections, as part of Citi India’s priority sector lending obligations, results released last year showed.

Outstanding credit cards as of February stood at 2.65 million, the largest among foreign banks in India, ahead of 1.46 million by Standard Chartered and 1.56 million by Amex. Citi India had 2.9 million retail customers with 1.2 million bank accounts as of March 2020.

At the end of March 2020, Citibank served 2.9 million retail customers with 1.2 million bank accounts and 2.2 million credit card accounts.

Earlier acquisitions

Local lenders have profited from foreign banks’ exit from India over the last decade. IndusInd Bank for example brought and built up Deutsche Bank’s credit card portfolio in 2011 and followed it up by buying Royal Bank of Scotland’s (RBS) diamond financing business in 2015. Another private sector RBL Bank also started its credit card business by purchasing the portfolio from RBS in 2013.



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DBS Bank says its system not compromised, leaked messages don’t have sensitive info, BFSI News, ET BFSI

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DBS Bank on Wednesday said there is no compromise of its system, and the messages leaked by hackers do not contain any personal or sensitive information. The bank issued a statement after hackers leaked a sample of transactional messages allegedly taken from the system of enterprise communications firm Route Mobile had some details which referred to DBS Bank.

“DBS Bank systems have not been compromised in any way. The bank is committed to protecting customer data and adopts a robust layered defence approach.

“We use SMS services through a few service providers for customer notifications. However, none of these messages contain any personal or sensitive information,” DBS Bank said in a statement.

Hackers have allegedly compromised servers of enterprise communications firm Route Mobile, even as the company claimed that data of its customers is safe and its cybersecurity team is investigating the matter.

According to cybersecurity experts, data of companies like Tata Communications, Bharti Airtel and DBS Bank have been leaked due to the alleged breach in Route Mobile’s system.

A sample screenshot of the leaked database showed the mobile number of customers, amount transferred by them and one-time passwords allegedly sent from the bank to its customers.

“Messages with authentication codes are valid only for extremely short durations and in any case cannot be used to access any customer information without the customer’s user ID and password,” DBS Bank said.

Route Mobile has said it is investigating the incident, adding that it has not come across any evidence that shows impact on its customer’s personal data.

The company further said it takes all data security claims seriously and has “engaged a third party cybersecurity consultant to independently verify and audit our findings”.



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