Douglas Blakey talks to Samir
Bhatia, Barclays’ managing director for India and the Indian Ocean
region, about the UK-headquartered bank’s expansion plans for the
fledgling Indian market. In his view, there is an excellent
opportunity to serve every segment of the market, from the wealthy
to the small village trader.

The bullish announcement last May by Barclays, the
UK’s third-largest bank, of a major retail banking push into the
fast-growing Indian market was rather overshadowed by its
high-profile and ultimately unsuccessful battle to acquire ABN

At the time, it said it would “redefine” retail banking in the
Indian market and across the region and planned a new range of
credit cards, personal loans, business instalment loans and
investment products (see RBI 573). It appointed Samir
Bhatia, a retail banking veteran, as managing director of Barclays
India and Indian Ocean to spearhead the bank’s entry into the

Talking to RBI at the end of March, Bhatia said: “Despite
being new to the [Indian] market we already have a few firsts to
our credit that take banking beyond convention.”

The most recent product roll-out is a mobile phone-based banking
service for the Indian mass market called Hello Money (see RBI 588). “Our mobile banking
proposition is one of the biggest innovations [and] will prove to
be revolutionary in the market. Through Barclays Hello Money we
intend to reach out to the underserved and the unbanked,” he

Stealing a march

Bhatia rejected the notion that retail banking market leader ICICI
had stolen a march on Barclays with its iMoney mobile product, a
free service compared with Barclays’ mobile banking fee of INR30
($0.73) a month (see RBI 586).
“Hello Money is based on a completely different platform –
Unstructured Supplementary Services Data – which is being used in
India for the first time. It is fast, convenient, secure and a
cost-effective way of accessing banking services on your mobile
compared to any other mobile banking service proposition in the

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In particular, the Barclays service avoids the need for mobile
phone users to pay SMS or GPRS subscriptions every time they use
the service.

Unable to open a significant number of branches in the country due
to regulations (it currently has just four), a successful
multi-distribution strategy will be vital if Barclays is to punch
above its weight in the increasingly competitive Indian market. “We
believe a limited branch network is not a constraint. Our customers
can withdraw cash from over 23,000 Visa ATMs without any cash
withdrawal charges. We are reaching to our customers through direct
access channels such as ATMs, sales agents, mobile banking and the
internet, and we have services like doorstep and workplace

According to Bhatia, Barclays has enjoyed initial success in India
thanks to differentiated product offerings and the response so far
has been very encouraging. “Within less than a year, we have built
a sizeable customer base of over 600,000 customers. The performance
of the bank has been satisfactory and we have grown according to
our expectations,” he added.

Product launches have included a seven-year personal loan (“We are
the only bank in India to offer this”); a Premier League credit
card for India, which leverages Barclays’ sponsorship of English
Premier league soccer; and India’s first platinum debit card.

Optimistic business prospects

Looking ahead, Bhatia is optimistic about the business prospects in
India. “Retail credit in the domestic sector has grown by 25 to 30
percent over the last few years [and] the Indian credit market is
expected to maintain current growth levels.”

“The economy is growing at more than 9 percent. There is an
opportunity to service every segment of the market from the mass
affluent to small village traders. It is a unique market where we
have found that every segment is under-serviced. At one level, we
will target high net worth individuals and the affluent with our
Premier services; at the other end we have launched products like
Zero Balance and No Frills for the mass segment.”

In a country in which sporting and film stars have been
successfully employed by a number of banks to act as brand
ambassadors, Barclays lost no time getting in on the act, signing
up Indian golfer Jeev Milkha Singh to promote its Premier products.
“Our core brand communication strategy is to stay ‘top of mind, top
of market’. We are working towards building a brand that stands for
trust, confidence and transparency. We have a high recall in the
segments in which we are present as we have channelled our energies
to create a high impact.”

An integrated ad campaign including outdoor, display, TV and radio
publicised Barclays’ retail debut in India. “The use of emerging
media such as the internet and mobile advertising has helped us
further consolidate our positioning in the minds of our prospects…
Hello Money will also add a new dimension to our brand building
initiative, with below-the-line activities like on-ground
promotions and an interactive digital campaign giving an experience
of the service to customers,” he said.

As for the suggestion Barclays could accelerate its expansion plans
by making an acquisition, if as expected Indian legislation is
amended in 2009 to allow for such an eventuality, Bhatia quoted his
CEO John Varley: “Acquisition is the servant of strategy, not the

Summing up the first year, Bhatia said: “We are in the right market
at the right time and introducing the right products.”