After successfully implementing the first three elements of its strategy to emerge as the country's largest foreign bank, the Rs 30,000 crore (Rs 300 billion) Standard Chartered Bank has now taken up another three-point strategy to drive its growth plans.

The new strategy consists of expanding its presence in second-tier cities, offering products to the small and medium business segment and developing customised products for non residents.

"We were successful in implementing our earlier three plans- of leveraging unsecured products portfolio, establishing mutual fund and investment services, and extending our reach and processing capabilities to drive organic growth," Vishnu Ramachandran, regional head (consumer banking) for the bank's Indian operations said.

The bank is now planning to strengthen its presence in the metros by opening 23 new branches and 81 automated teller machines in the current calendar year. "Our target is to have about 150 branches in 40 cities including 25 second-tier cities in the next two-three years," Ramachandran said.

The bank currently has 66 branches in 24 cities. It also plans to focus more on retail business to drive its growth. At present, its retail assets consist of about 25 per cent of the total advances and about 60 per cent of the deposits are mobilised from retail customers.

The domestic retail opportunity is very attractive and is driven by structural reasons such as retail deposits as a percentage of gross domestic product is increasing and retail loans as a percentage of GDP is less than 5 per cent.

Similarly, just less than one per cent of consumer expenditure is transacted through plastic means, Ramachandran said.

Four factors will drive rapid retail growth, namely increasing urban household income distribution, changing customer attitude, lower interest rates, regulatory forces and supply side economics, he listed.

The bank estimates mortgage interest rates to dip below 8 per cent by 2005 from the present 10.5 per cent level and one-year deposit rates to come down to 6 per cent from 7 per cent.

Ramachandran admitted that the bank's relative share of new bookings in the credit cards market has come down in recent months because of the new card launches by other banks.

However, we are still market leader in the total receivables outstanding with a 34 per cent market share and 24 per cent share of the total number of cards in the country, he said.

The bank's credit cards business in the country is eight years old.