1st South Asian bank in state opens in Iselin
Indus American Bank plans to open five more banks over next 5 years
BY JAY BODAS
Staff Writer

WOODBRIDGE — The South Asian community has a new place to store its hard-earned money.

Indus American Bank, which bills itself as the first community bank for the South Asian community in the state, recently opened its doors on Oak Tree Road in Iselin.

“The bank was founded for the South Asian community, for business-owners or individuals, with personalized service, and we are a state-chartered bank and FDIC-insured,” said President and CEO Kevin Lenihan at a press conference last week. “We are hoping to serve that market. We recognize that it is sort of an underserved market and the potential to serve it is tremendous.”

Almost 30 percent of the Asian Indian population in the United States lives in the tristate area, according to the 2000 U.S. Census. That includes nearly 170,000 residents in New Jersey. Almost one-third of those live in Middlesex County, according to census statistics.

More than 125 shareholders contributed start-up capital totaling over $12 million, bank representatives said. Of that number, nine founders contributed $3.5 million.

Bank representatives say the difference between Indus American Bank and larger national banks is its unique attention to the needs of the South Asian community.

“For example, our staff is multilingual, and that is on purpose, so that everyone who will walk through the door gets an instant comfort level,” said Deepak Khanna, one of the bank’s founders.

The bank wants to serve small-business owners in addition to individual customers.

“The major commercial banks want to serve bigger businesses, and the smaller business person often does not get served,” Khanna said. “When it comes to small loans, the Indian community is a large saver. There may be gas stations and grocery stores that are not financed by large banks, but we will because I think that we understand those banking needs.”

“Whatever a bank like Wachovia does, they would have to do it on a national level,” said fellow bank founder Anil Bansal. “Unless you are asking for a very large loan, they may not approach your application with the same level of excitement that we may have. You can pick up the phone and say you have a special need, that you need to come in a few minutes after the bank closes, and we will do our best to accommodate you.”

However, while the bank is open for new accounts, Internet banking and certain money transfers are not yet available.

“We do offer wire transfer now, meaning you can wire money to India via traditional means, but we are hoping to strike a partnership with respect to international banks, such as the State Bank of India and others, which have hundreds of locations throughout South Asia,” Lenihan said. “Right now most of the time the money would have to go to a major city.”

He expects Internet banking will be up and running by the end of the first quarter of 2006.

The bank plans to open five branches in the next five years in the tristate area, said Khanna.

The Iselin-Edison area is one of many clusters with a significant South Asian community, he said.

“In New Jersey there are about four to five clusters where we could venture into the market,” Khanna said. “If we could cross the border into New York, there is Jackson Heights and Flushing, and I could name five or six clusters where we could easily open up. So if you look at the runway before us, we are just starting out. In five years we should be able to open at least five branches and to have collective assets of $500 million.”

A second branch of Indus American

Bank is planned for Jersey City in 2006, Khanna said.

Lenihan has extensive experience with ethnically focused banks.

“My experience has all been in New Jersey,” Lenihan said. “This is now my third ethnic bank. I also worked with United Heritage Bank and Hamilton Savings Bank, which each served a Chinese and Hispanic population, respectively. My experience with other ethnic banks likely gave the founders a comfort level.”

Bank representatives say that while a bank geared to the South Asian community in this region is a first, there are already many banks geared toward other ethnic groups.

“There are about 100 U.S.-based Chinese banks serving that community,” Khanna said. “There are also about 14 U.S.-based Korean banks serving that population, but there are no Indian banks serving that population. The idea is very compelling to serve this community, and this is why we started.”