CSB Bank, backed by Fairfax, is set to expand overseas for the first time with a representative office in Dubai. This move aims to better serve non-resident Indians and increase the bank's share of NRI deposits amidst strong competition. The RBI has approved the plan, and CSB awaits approval from the Dubai regulator.

CSB Bank plans to open first rep office in Dubai

CSB Bank Breaks New Ground: Expanding to Dubai!

In a significant move, Fairfax-backed CSB Bank, based in Kerala, is set to embark on its first-ever international expansion. The bank has submitted an application to establish a representative office in the bustling financial hub of Dubai. This strategic move aims to better serve Non-Resident Indians (NRIs) and capture a larger share of the competitive NRI deposit market.

The Reserve Bank of India (RBI) has already given the green light to this exciting venture. Now, CSB Bank awaits final approval from the Dubai regulator, according to Managing Director and CEO Pralay Mondal, who spoke with ET. He expressed optimism, stating, "If we get that, we will be able to service our customers better. We had a conversation with the Dubai regulator; they are happy with our representation."

This new representative office will play a crucial role in bolstering CSB Bank's retail deposit mobilization efforts over the long term. Currently, the bank relies heavily on bulk deposits to fuel its loan growth. Mondal highlighted this dependency, explaining that:

The share of bulk deposits increased to 41% at the end of June, up from 35% a year ago.
A significant portion of these bulk deposits were secured in the March quarter to anticipate potential liquidity constraints.
This strategy facilitated a 31% year-on-year growth in assets.
However, this approach has resulted in a 5-6 basis point increase in the cost of funds.

This expansion marks a pivotal moment for CSB Bank, showcasing its ambition and commitment to serving its NRI customer base more effectively in a highly competitive global market.