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Presentation
On
Presented By:-
Kinjal Trivedi
Arati Patel
S.V. Institute of Management
modern
banking
services,
uniform
currency
and
The
first
phase
of
banking
reforms,
triggered
by
http://www.prachimishra.net/WOS_RBI_Reg_nov27.pdf
Contd.
3
indigo and tea from Kolkata, rice from Burma, sugar from
Java, tobacco from Sumatra, hemp from Manila and silk from
Yokohama, all flowing to the west through Indian ports,
subbarao-shanghai-banking-corp
Foreign
Public
Private
banks
sector banks
sector banks
Number of banks
43
26
20
Number of branches
327
75,779
16,001
Share of deposits
4%
77%
19%
Share of assets
6%
74%
20%
Share of off-balance
63%
18%
19%
sheet assets
Contd....
9
On 28 February 2005, the RBI released a roadmap for the presence of foreign banks in
India along with guidelines on ownership and governance in private sector banks.
The new private sector banks also spurred an opportunity for foreign banks and
investors to participate in the Indian banking sector through equity investments. For
example, ING hiked its stake in ING Vysya Bank to 44% in 2002, HSBC acquired
14.71% stake in UTI Bank (today known as Axis Bank) in 2003, Temasek Holdings
acquired 5% stake in ICICI Bank in 2003 and later increased it to 9%, Rabobank
acquired 20% stake in Yes Bank in 2004 and HSBC acquired 4.74% stake in Yes Bank
in 2008.
Foreign banks were to be encouraged to grow their presence in the country post 2009.
The promised growth path and the perception of India as an emerging economic
power attracted many banks to set up presence in India in the period after the
roadmap.
11
In the aftermath of the financial crisis of 2008, the attention of multinational banks,
particularly of those with a large presence in the west, turned to their home countries
as they struggled with sudden liquidity problems, many of them going to the brink.
Contd....
13
http://rbidocs.rbi.org.in/rdocs/Content/PDFs/SBSC061113F.pdf
INR 5 billion
requirement
14
Minimum CRAR
10%
targets
Raising of funds in India
Branch licensing
Board of directors
brings back the focus on foreign banks functioning in India which it has
been looking to streamline since 2005. It favors entities such as Deutsche
Bank, Citigroup and the Hong Kong and Shanghai Banking Corporation to
form a company in India, called subsidiarisation, instead of functioning as
branches of their overseas parent companies.
Contd....
16
Table below presents the performance of foreign banks vis--vis public and private
sector banks in the country. Foreign banks tend to lend more, have higher returns,
lower costs, and better credit quality (interestingly domestic private banks have lower
NPAs compared to foreign banks).
Foreign
banks
Credit-deposit ratio
91.6
77.9
81.9
Return on assets
1.9
0.8
1.6
Return on investments
8.1
7.6
7.3
Cost of funds
4.1
6.3
6.1
3.0
3.8
1.9
Source: RBI. Cost of funds is the interest paid on deposits and borrowings as ratio of total
deposits and borrowings.
Branches
Capital and
Deposits Advances
reserves
AB Bank Limited
751
1214
625
3274
7043
5198
7604
6747
17103
2302
795
7603
2138
45160
73780
76230
2886
6958
6926
Bank of Ceylon
1757
1194
999
17850
60556
77661
17
17593
5963
24042
Credit Suisse Ag
13066
4187
4550
12
29303
154876
138581
Deutsche Bank Ag
17
78913
207943
223741
3033
713
2594
50
151958
568660
357087
2229
1488
51
4818
1771
3372
57535
103687
53445
1114
99
885
491
1835
160
18
Mashreq Bank Psc
1208
1194
547
1530
1636
Rabobank International
6139
834
5899
Sberbank
1443
47
370
Shinhan Bank
5725
14404
12061
Societe Generale
8571
13826
17569
Sonali Bank
98
398
184
100
191531
620017
619543
6062
6009
8150
10834
15
34023
41464
68395
31
28319
127494
125339
UBS Ag
20675
25575
9741
1559
62
358
Westpac
19
Woori Bank
8172
1636
2158
329
20
THANK
YOU
S.V. Institute of Management