India's private banks profit from demonetisation drive

The country’s ultra wealthy are shunning property and gold and turning to equity and debt investments.

Bloomberg reports that the Indian government’s widespread crackdown on dirty money is boosting the growth prospects of the country’s private banking industry as a major lender has been steadily beefing up its wealth management arm in anticipation of higher demand.

HDFC Bank is planning to hire as many as 150 relationship managers by the end of 2020, group head of private banking Rakesh Singh told Bloomberg. The intensified recruitment activity comes as India’s ultra wealthy started moving away from investments financed in cash like real estate and gold to debt and equity instruments following tighter oversight since the 2016 demonetisation.

“Demonetisation has been the inflection point for the private banking business in India,” Singh said, predicting HDFC bank’s wealth assets will double to a record $16 billion over the next three years. 

Singh said HDFC is seeking to grab a larger share of the growing number of millionaires in India, as well as to get existing clients to increase their transactions and investments through the bank.

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