ICICI Bank braces to replicate its Indian success in Sri Lanka

ICICI Bank’s Deputy Managing Director Ms. Chanda Kochhar

Happy with performance thus far, plans aggressive roll out of branch network and product portfolio for retail and corporate banking

India’s biggest private sector bank ICICI Bank last week expressed satisfaction over its progress in Sri Lanka during the past 20 months but revealed plans for an aggressive foray in terms of reaching and meeting diverse customer needs in the future.

“We are happy with our performance and we have firm plans to ensure a meaningful presence in Sri Lanka with an expanded reach and product offering,” ICICI Bank’s Deputy Managing Director Ms. Chanda Kochhar told journalists last week in Colombo.

Featured among Fortune’s list of most power business women in the world, Ms. Kochchar was in Colombo to deliver the keynote address at the Association of Professional Bankers (APB) Sri Lanka Chapter.

“Sri Lanka is an integral part of ICICI Bank’s global strategy,” she added.
With overseas presence in 18 countries, Ms. Kochchar said that ICIC Bank has also identified Sri Lanka as a growth market apart from realizing vast scope for several of its products which enjoy market leadership in both India as well as growing popularity in select global markets.

In delivering solutions to the Sri Lankan market, ICICI Bank will be guided by a specific country focus and leverage on core competitive strategies in product suite, technology, distribution and back office.

The 50-year old ICICI Bank for first 40 years of its existence was exclusively a development financial institution specializing in project finance. However 10 years ago it transformed into a commercial banking entity and in a short span has risen to being the biggest private sector bank as well as the largest in terms of assets. It now boasts of a customer base of 30 million.

With dedicated teams, ICICI Bank in Colombo has thus far been active in retail and corporate banking in addition to participating in several debt syndication deals involving lending to both the Government and the corporates. In the personal banking arena it has already introduced “delivering banking to customer’s doorstep,” a strategy which it pioneered in India and ensured dominance in the retail market.
ICICI is also planning an aggressive role out in Sri Lanka, of its foreign remittance products, which too have garnered leadership in India with a share of 25% of the giant neighbours’ US$ 30 billion inflows market. It already has forged an alliance with Lankan savings giant NSB on the remittances market.

Internet banking only is another product that ICICI believes has scope in Sri Lanka having successfully marketed in countries such as UK and Canada.

Recently in Sri Lanka, ICICI confirmed its aggressive deposit mobilization strategy by offering 12% high interest on its savings product while its auto loans too have attracted customers.

Currently operating with a single branch, Ms. Kochchar disclosed that ICICI has already applied for approval from the Indian regulator (Reserve Bank of India) for expansion of the network in Sri Lanka. However ICICI Bank officials didn’t specify how many branches or where the locations would be. However at present ICICI Bank customers have the convenience of harnessing the VISA supportive ATM network in the country for their services.

Promoting greater bilateral trade as well as business partnerships including investments between Sri Lanka and India is also a key focus of the Bank.

ICICI Bank has also found the regulatory environment very conducive in Sri Lanka whilst it picks no bones with regard to the high taxation regime, which some of the local banks, have frowned on. “We have no issues over the taxation while we are also keen to comply with regulatory requirements,” ICICI Bank officials said.

Ms. Kochchar also said that entry of foreign banks into any country ensures customers get the best deal. Despite long term presence of global giants such as HSBC and Citigroup in India, ICICI Bank has made sure that it remains competitive and innovative to retain if not step up its market dominance.