How are your customers responding to the conflict?
We have not seen any major disruption in our deal pipeline. Transactions with little dependence on the region have either been completed or remain on track. Some deals have been delayed due to market factors such as pricing, availability, or jurisdictions involved. Transactions directly linked to West Asia are on hold. From a client-risk perspective, we have classified customers into different buckets depending on whether they are impacted by currency volatility, commodity prices, or supply-chain disruptions. At this stage, availability rather than price is the key concern. We are focused on supporting corporate clients-some have cross-border issues, others are facing domestic challenges.
What are the supply chain disruptions they are facing?
What we are seeing goes beyond first-order supply chain disruptions. The bigger risk lies in second-order effects, which are not yet fully visible. For example, a supplier affected by shortages-energy inputs-can create cascading disruptions further down the supply chain. Some clients have sought financial support or postponed large transactions, but overall, the disruption is global. Compared with many regions, India is relatively well positioned and has managed the situation better than several economies.
What would be the impact of the war on banks?
My personal view is that the situation will not persist for too long. If it does extend, the second-order supply-chain impact will become more visible, and different sectors will be affected differently. Banks and corporates have already done the maths on oil prices and their implications for the economy. The RBI has been seeking information from banks on an ongoing basis but there has been no formal stress-testing directive specific to this issue so far. At this stage, timelines remain uncertain, and we are hopeful the impact will be short-lived. How will it affect growth and inflation?
In the near term, growth may be affected as some expansion plans are pushed back, and prolonged disruption could dampen consumption. Historically, a 10% rise in oil prices has resulted in about a 0.15% hit to GDP. On inflation, the buffers today are much stronger. The inflation differential with the US is around 1.5%, compared with 4.5-5.5% over the past decade. Food prices remain benign, and overall inflation buffers should help absorb the impact in the medium term.
How has your experience been at GIFT City since Standard Chartered is also the settlement bank for dollar clearing?
Business in GIFT City has grown strongly-so much so that we have expanded premises and strengthened teams. Dollar clearing in GIFT City is steadily picking up. We have onboarded a large number of counterparties, and transactions have already begun. A key advantage is the ability to settle locally without waiting for US markets to open, making intra-day and net settlements more efficient. Since inception, we have facilitated about $23 billion of business in GIFT City, including aircraft financing, refinancing of microfinance and education loan entities, and enabling regional treasury centres for corporates.
How is the wealth management business faring amid the war?
So far, no impact on the wealth management business directly in the short term. The access to markets continues the way they are. There are different investors that have taken different calls-whether to invest more, whether this is the bottom. But I don’t think there is any permanent shift in the wealth management space so far that we have witnessed.
How do you differentiate in wealth management?
As a foreign bank, we are not positioned to cater to large numbers…we would rather have the ability to contribute with our cross-border capabilities, with FX, with trade, with other things that we can do for our clients, rather than try to be everything for everyone. We have enabled our Standard Chartered Securities, where we are able to offer non-discretionary PMS services, structured products, and close all the gaps so the customer doesn’t need to go out to a third party.
Any risk on banks due to the slowdown in IPOs and fall in the equities market?
IPOs are being deferred, not scrapped. Once markets stabilise, India is likely to be among the first to see activity resume, potentially at more attractive valuations for global investors. In the interim, companies may rely more on financing, which creates partnership opportunities for banks. Foreign investor outflows reflect several factors-lower interest-rate differentials, rupee volatility, relatively rich valuations, and global opportunities such as AI elsewhere. Many investors are simply booking profits. FDI flows are currently more debt-oriented than equity-led, but there is a pipeline. We have conducted over 25 global roadshows to market the India and GIFT City story, and recent engagement from European and UK firms has been encouraging, especially linked to FTAs.
What is currently the biggest challenge for banks?
Deposit mobilisation. While banks are well capitalised, NPAs are in control, they have good mix of corporate and retail, new investments have come, household savings are increasingly shifting to other asset classes-mutual funds, insurance products, commercial papers, and private credit. The colour of deposit is changing, driven by financialisation of households. Market volatility may eventually nudge conservative investors back towards bank deposits.
Do you think mis-selling is rampant?
Mis-selling is largely a consequence of incentive structures within banks. It does happen, and banks need to introspect on incentives, training, and guardrails to protect customers. The regulator’s focus is not on stopping third-party sales, but on ensuring adequate safeguards. Proper systems and controls do not necessarily mean lower volumes, but better conduct.