HDFC Bank, the second largest private bank in India, has opened a branch in the Dubai International Financial Centre (DIFC) to support international activities of non-resident Indians (NRIs) in the emirate.

HDFC aims to capitalise on the strong trade flows between India and the UAE, as well as support the growth ambitions of NRIs based in the emirate and looking to do business internationally with Europe, Africa or the Americas.

The UAE is one of India’s main trading partners, with bilateral trade valued at $75bn in 2012-2013, compared to $43bn in 2009-10.  

The branch will allow NRIs to access products such as trade finance and treasury services from within Dubai, rather than dealing with an overseas branch of the bank. HDFC will be mainly targeting high net-worth individuals with a minimum of $500,000.

The existing UAE offices will continue to serve NRIs but will remain very “India-centric”, providing basic services related to clients’ accounts held in India, Ashish Parthasarthy, treasurer, at HDFC Bank tells MEED.

The UAE is a key market for HDFC’s international banking arm, with the bank already operating two representative offices in Abu Dhabi and Dubai.

Approximately 40 per cent of HDFC’s $10bn NRI deposit base comes from the UAE, Abhay Aima, group head, equities and private banking group at HDFC told reporters in Dubai on 4 August.

The DIFC branch is the bank’s third branch outside India, with existing offices in Bahrain and Hong Kong. The bank’s international book size stood at $5bn in 2013, representing 7 per cent of the bank’s total assets.

The bank is looking to further expand its international operations. “We are definitely looking at some presence in southeast Asia, actively looking at Singapore. That would be the immediate future,” says Aima. Discussions surrounding the possibility of a Mauritius branch are also in the early stages.

HDFC has previously used its Bahrain operation to raise funding via its $1bn overseas medium note programme. It will not have this capability through its Dubai office.

In 2013, the bank raised two bonds via Bahrain, a $500m five-year bond in March and a further $500m three-year bond toward the end of the year. Parthasarthy says as yet there are no concrete plans to issue any further bonds in 2014.

There are a growing number of Indian banks establishing a presence in the DIFC, with Bank of Baroda, State Bank of India and Union Bank of India running operations within the finance centre.