DBS Bank India is set to double its exposure in the small business segment over the next three years after achieving its target of a billion-dollar book. This move comes as the bank sees significant growth potential in the sector, which contributes nearly 30% to the country’s GDP and is a major job creator.
Rajat Verma, managing director and head of institutional banking at DBS Bank India, highlighted the bank’s focus on growing its SME (small and medium enterprise) book and introducing new products to cater to the needs of startups. Verma emphasized that the small business segment is not just about lending but also involves managing the liability side of the business.
The bank’s SME business revenue has already increased to 20% of its institutional banking revenue in the first quarter of 2024, up from 19% in the same period last year. Verma expressed confidence in the current growth trajectory of the small business segment, expecting it to continue at a steady pace.
With a strong focus on maintaining asset quality, DBS Bank India has seen a decline in its overall gross NPA ratio, standing at 5.61% as of March 2023. Verma attributed the sector’s improved asset quality to factors such as reduced information asymmetry and access to data from credit bureaus and GST returns.
The bank’s strategy includes long-term partnerships with SMEs, midcaps, and large caps, with a focus on sustainable growth. Additionally, DBS Bank India’s ESG financing book has surpassed SGD 1 billion in 2023, with plans to exceed growth targets substantially by the end of 2024.