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DBS Bank may be Singapore's largest bank today, offering a full suite of services from consumer banking to loan syndication for international corporates.
It was not like this 40 years ago.
When it started off in 1968, it was meant to be a development bank to lend a helping hand to industrialise Singapore.
It was set up by the Government to meet a vital need, financing new, relatively risky projects that other local banks did not address, said Mr S. Dhanabalan yesterday.
Hence, its name - Development Bank of Singapore. It later changed its name to DBS as the bank began to morph into a full-service financial institution.
One of the architects of the modern DBS, Mr Dhanabalan recalled the unconventional route the bank took.
Unlike the local banks of the 1960s, which required security to be put up for loans, DBS was 'completely different in its approach to project financing'.
It lent money to companies on a cash-flow basis, assessing a new project's potential for profitability and the cash it earned every month from its business - a 'bold approach'.
This was needed for many infrastructure projects as well as fledgling technology industries such as electronics manufacturing.
DBS was also different from the other local banks, which were largely family-owned entities, as it was listed soon after it was set up.
'Dr Goh Keng Swee urged DBS to list soon after it was established...In those days, you could list without a prospectus,' recalled Mr Dhanabalan.
So DBS raised $49 million in capital from the Ministry of Finance, $26 million from the public and $25 million from local and foreign banks.
Not surprisingly, these banks were 'very unhappy shareholders' when DBS decided several months later to expand into commercial and consumer banking.
But Dr Goh, who was then finance minister, threw his weight behind the idea and DBS became a direct competitor to these banks.
'Although we were a full-fledged commercial bank, (we) set ourselves apart,' said Mr Dhanabalan.
'We were the first to introduce Saturday afternoon banking, which made other banks very unhappy. Later, we offered interest payments on current accounts,' he recalled.
Mr Dhanabalan noted that while many other countries limit the number of free transactions for each customer, Singaporeans today enjoy the convenience of Giro payments, ATM machines and other services for free.
Indeed, Singaporeans are so used to free services that they complained about having to pay a $2 monthly fee if their deposits at POSB, a DBS subsidiary, do not meet a stipulated minimum requirement.
'I think we should have charged something from the beginning,' he said.
Mr Dhanabalan, who helped to build up DBS's business from 1968 to 1978, declined to return to the bank in the early 1990s.
Explaining his decision, he said: 'I had just left the Government (and) was not comfortable to go from Cabinet to do something related to the Government.'
Mr Dhanabalan did go back to serve DBS later as chairman from 1998 to 2005.
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