Axis Bank set to manage HNI wealth by year-end
Axis Bank will roll out its ‘Family Office’ accounts for wealthy Indian business families by the end of this year. The bank has already tied up with Geneva-based Banquee Privée Edmond De Rothschild Europe (BPERE) for the venture.
A top brass official with the bank, on condition of anonymity, said, “We expect to launch it by end of this year.”
But the bank has already started “a little bit of seeding” work, including awareness campaigns and meeting prospective clients. A recent report published by Merrill Lynch Wealth Management and Capgemini SA said India’s HNI population is likely to treble in a decade, compared to 84,000 nine months back.
According to sources, the bank will manage personal and business requirements of wealthy business families, including children’s education, their responsibilities of ownership in the business and healthcare issues of the family. Already, there are players like Barclays and Kotak Mahindra Bank in the field.
“The definition of HNI [applicable to millionaires] abroad is not applicable here. So we have decided to offer Family Office services to people with an annual income of Rs 2.5-3 crore, while those having an annual income above Rs 1 crore will be serviced by the wealth management team,” said SK Chakrabarti, executive director (retail banking, SME & agriculture), Axis Bank.
Ravi Trivedy, executive director of KPMG, feels that while the new entrepreneur class is looking for better investment opportunities, banks have also started focusing more on new money.
“While the old money may not be interested in such services, new age professionals want their money to grow,” he said.
According to Trivedy, definition of HNI in India varies widely from one financial institution to the other and some are even ready to consider people with an income of Rs 20 lakh per annum as HNI clients.
“Raising the threshold limit for an HNI will help the customer ultimately as there are institutions which have a single person catering to 40-50 clients with Rs 20-25 lakh annual income. Such mass retail products will not be very effective for customers,” he said.