Japan’s largest bank, Mitsubishi UFJ Financial Group (MUFG), recently made a significant move in India by doubling its investment in DMI Finance, committing an additional ₹4,712 crore. This marks a key step in MUFG’s strategy to increase its presence in India, a country poised to become the world’s third-largest economy. Masakazu Osawa, MUFG’s Asia Pacific CEO, shared insights on the bank’s plans in India.
India as a Strategic Focus
MUFG Bank has been focusing on expanding its business in Asia, outside of Japan, since 2013. The bank has invested in several commercial banks across the region, including Krungsri Bank in Thailand, Bank Danamon in Indonesia, Security Bank in the Philippines, and VietinBank in Vietnam. These investments have allowed MUFG to broaden its client base, including local corporations and SMEs, particularly in Thailand and Indonesia.
Starting in 2017-18, MUFG began targeting the consumer finance and startup sectors. The bank invested in Grab Singapore in 2020 and sees India as a key strategic market due to its strong digital financial services platforms. In 2022, MUFG launched the Ganesha Fund with a $300 million investment limit to support startups, and the recent additional investment in DMI Finance further highlights the bank’s commitment to India.
Long-Term Vision for India
MUFG has been operating in India for 70 years, primarily focusing on corporate banking. The bank aims to continue this strategy while also leveraging its expertise at its GIFT City branch to strengthen its competitive position. MUFG is also expanding its capital market business in collaboration with Morgan Stanley, in which it holds a stake of over 20%.
Openness to Future Opportunities in India
While MUFG is open to exploring more opportunities in India, Osawa acknowledges the regulatory challenges that limit the bank’s ability to acquire full-fledged banks in the country. However, MUFG remains committed to expanding its client coverage from large corporations to local companies and is open to any possibilities that may arise in the Indian market.
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