Niche Accent Profile: State Bank Of India (California)

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STATE BANK OF INDIA

(CALIFORNIA)

Downtown Los Angeles

FOUNDED: 1982

CEO: Dinesh Pandey

FOCUS: Indian-American community

L.A. COUNTY BRANCHES: 3

State Bank of India first ventured into California in the early 1970s to serve immigrant pistachio and almond farmers. Now, the bank is more likely to count high-tech innovators, business owners and import-export entrepreneurs among its customers.

As the Indian-American population has ballooned, the bank, headquartered in downtown Los Angeles, has grown to 10 branches and more than $800 million in assets. Dinesh Pandey, the bank’s chief executive, said 80 percent of its customers are Indian immigrants.

“We go to those places where Indian expatriates are and we can get business immediately,” he said.

The bank, which was officially chartered in 1982 as State Bank of India (California), is the U.S. subsidiary of a 200-year-old Indian bank, which has 100 million customers and 21,000 branches in the South Asian country alone. Over the years, the parent bank has followed the Indian diaspora, setting up foreign offices in 33 countries.

The L.A. bank has done big business with Indian immigrants looking to set up their own businesses. In the third quarter, it made 68 small-business loans totaling $18.2 million. The institution still serves farmers, too: The bank loaned $16.9 million to agricultural enterprises last quarter.

But it also caters to customers who want individual accounts for ease of funds transfer to their relatives back home.

“They require a very good international money-transfer product and we get a very good fee income from our remittance business,” Pandey said.

The connection to India even influences staffing decisions. For instance, Pandey was a regional bank manager in Mumbai in 2008, when he was tapped for the top job at the California bank. He will exit in 2013, when incoming President V.S. Thirumalaiappan takes the helm as part of a regular rotation.

During his tenure, Pandey has diversified the bank’s loan portfolio and positioned it to appeal to more mainstream customers.

“We are trying to change the image of the bank,” Pandey said. “We’ve made our branches more welcoming to local customers by updating them and offering more professional services.”

Personal, hands-on service is appealing to many of the new customers the bank attracted 18 months ago, when many Americans fled big banks due to fee hikes; Pandey estimated that his checking account business increased by 40 percent at that time.

His goal for next year is to improve online banking services, continue to increase new business and hold on to his core customers.

“Most speak good English, so they have no language barrier with other banks in California and many of them also have accounts at Wells Fargo and other places,” Pandey said. “We reach out to them also, advertising through Indian communication channels and in local newspapers where there are large Indian populations.”

— Karen E. Klein

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