The country’s second largest bank is making a late entry into the private banking sector. ICICI Bank is extending its retail focus to the higher end of the market. However, the bank is a latecomer in this segment. A host of foreign banks like BNP Paribas, ABN Amro, Deustche Bank, Citi, HSBC, Merrill Lynch have been in the segment for the past few years and hence ICICI Bank will have to face competition from them.

India has seen an increase in the number of millionaires (those with liquid assets of over Rs 4.3 crore) which is estimated to be at over 1 lakh. As ICICI Bank officials say, only around 20% of the market is with the bigger players.

The term, private banking, refers to the personalized service provided to elite customers as against mass retail banking. Private banking is more people and process-driven than capital intensive. ICICI Bank has been focusing more on the middle and the upper ends of the markets in recent times. It recently doubled the minimum average balance for its savings accounts from Rs 5,000 earlier to Rs 10,000.

"We already have 2,500 customers and are looking to add 1,000 more in the next one year. We will be launching this product in all the countries where we have a presence. Globally, this is a $30-trillion opportunity and is growing at a fast pace," says V Vaidyanathan, ED, ICICI Bank. ICICI Bank has set $1 million as an entry threshold for private banking. The bank has 250 relationship managers globally and plans to add another 100.

However, the bank would have to overcome many competent market players, not only from India but from abroad also. In addition to competition from existing foreign banks, the bank will face a challenge from new entrants. The world’s largest private banker, Swiss bank UBS, has got a banking license and is expected to enter the market soon. Others like Morgan Stanley have recently launched private banking in the country. There are also a host of Indian players in wealth management, where ICICI Bank has also been present for the past few years. ICICI Bank officials claim that they already have $26 billion of assets under management, of which $19 billion is in India.