British bank Standard Chartered Plc on Friday launched its private banking business in India, targeting the rich in an increasingly crowded market dominated by Merrill Lynch and Citigroup.
The Asia-focused bank wants to boost its revenue in a region where an increasing number of clients demand sophisticated investment advice.
"This would be for clients with more than a million dollars, or 40 million rupees," said Shiv Khazanchi, head of private banking for India and non-resident Indians.
"Today we are starting with 200 clients in Mumbai and we would be in six cities with 1,000 clients soon," said the banker, who moved from American Express in London to New Delhi.
International banks are drawn to Indian private wealth management as Asia's third-largest economy, growing at an average annual rate of 8.6 per cent over the past four years, is generating many dollar millionaires and resulting in booming stock and real estate markets.
India has some 83,000 millionaires worth a combined $290 billion, according to the Merrill Lynch Capgemini 2006 Asia-Pacific Wealth Report, and is the second-fastest growing private wealth management market in the world after South Korea.
Standard Chartered sold its Indian mutual funds business to Swiss banking group UBS AG in January but private banking was expected to be more profitable.
"We believe it is a profitable and attractive business," Singapore-based Peter Flavel, Standard Chartered's global head of private banking, told reporters.
Standard Chartered is hiring 50 employees for the unit in India, with nearly half of them already in place, Flavel said.