According to RBI survey, foreign banks operating in India generated more income from fee-based business like derivatives, stock, securities, foreign exchange trading services and financial consultancy or advisory services

Foreign banks operating in India are generating more fee-based income from derivatives, stock, securities, and foreign exchange trading services and financial consultancy or advisory services, says a study conducted by the Reserve Bank of India (RBI)

The survey on ‘International Trade in Banking Services’ (2012-2013) shows a study on Indian banks’ branches and subsidiaries operating outside the country as well as the foreign banks operating in India.
 

The survey reveals that, the Indian banks’ branches, which originated outside India, generated their major share of fee income by rendering credit-related services and trade finance-related services. However,
 

Findings of the Survey on International Trade in Banking Services:

Employment Distribution and Growth

1. Indian banks’ branches operating abroad employed 64.5% of employees from local sources, 32.5 %from India and remaining 3.0% from other countries;
    
2. The total share of local employees in foreign banks working in India was 99.6 % in 2012-13. However the number of employees of foreign banks operating in India decreased 8.1%;
    
3. Total number of employees of Indian banks operating abroad increased by 7.8 % during 2012-13.

Credit and Deposit Growth

1. Growth of credit extended by Indian banks’ branches operating abroad increased 31.7 % to Rs5,855.7 billion (US$ 107.7 billion);
    
2. Credit extended by foreign banks operating in India increased by 27.5% to Rs 3,077.0 billion (US$ 56.6 billion) during 2012-13;
    
3. Deposit mobilised by Indian banks’ branches operating abroad increased by 45.5 %during 2012-13;
    
4. In case of foreign banks operating in India, deposit growth moderated to 3.2 %from 14.3 %in the previous year.

Income and Expenditure

1. The total income of Indian banks’ overseas branches increased 28.1% to Rs365.6 billion (US$ 6.7billion) in 2012-13;
    
2. The total income of Foreign banks operating in India, increased 13.1% to Rs528.4 billion (US$ 9.7 billion);
    
3. Total expenditure accounted for about 75% and 71% of the total income of Indian overseas branches and foreign banks operating in India respectively.

Fee Income Generated

1. Total fee income generated by 170 overseas branches of Indian banks increased to Rs93.5 billion (US$ 1.7 billion) in 2012-13 from Rs68.0 billion (US$1.4 billion) in 2011-12;
    
2. Total fee income generated during 2012-13, by foreign banks operating in India declined to Rs74.5 billion (US$ 1.4 billion) from Rs 94.3 billion (US$ 2.0 billion) in 2011-12.

Country-wise Banking Services
 

Bahrain, Belgium, Hong Kong, Japan, Singapore, Sri Lanka, UAE, UK and USA were the major countries which together accounted for nearly 92.2% of the total banking services of the branches of Indian banks operating abroad.
 

The survey covered 170 overseas branches, 184 overseas subsidiaries of Indian Banks and 316 branches of foreign banks operating in India.
 

RBI said that it has done the survey with the intention of providing information on International trade in banking services (ITBS) of India. RBI has released the survey results including statistical data in tabular format to provide consistent and comparable data which are captured on financial auxiliaries’ services rendered by the banks based on explicit, implicit fees and commission charged to customers.