Survey on International Trade in Banking Services: 2016-17
Published: Nov 01, 2017
By TIOLCORPLAW News Service
NEW DELHI, NOV 01, 2017: The Reserve Bank of India (RBI) today released the results of the 2016-17 round of the survey of international trade in banking services (ITBS). The survey provides responses on employment, core banking services (like deposit, credit) and financial auxiliaries' services rendered by banks with cross-border presence, based on explicit/implicit fee/commission charged to customers. The survey provides responses on functioning of 192 overseas branches and 325 overseas subsidiaries of Indian banks as well as 286 branches of foreign banks operating in India.
Highlights of Survey:
1. T he presence of foreign banks in India declined in terms of number of branches and employees during 2016-17; the number of overseas branches of Indian banks, on the other hand, increased but there was marginal reduction in their employee strength.
2. The consolidated balance sheet of all the three categories of banks with cross border presence (viz., overseas branches of Indian banks, overseas subsidiaries of Indian banks and foreign banks in India) contracted during 2016-17, reflecting tepid global economic activity
3. Credit extended by all categories of banks declined during 2016-17; lending formed nearly 60 per cent of total assets of overseas branches of Indian banks (US $ 224 billion) in March 2017 whereas credit by foreign banks in India accounted for around 42 per cent of their total assets (US $ 125 billion).
4. Aggregate deposits of foreign banks in India increased marginally during 2016-17 but it declined for the other two categories of banks; deposits accounted for nearly 36 per cent of total liabilities of overseas branches of Indian banks as compared with around 57 per cent in the case of foreign banks in India.
5. Lower interest income coupled with increase in expenditure resulted in a ‘loss' for overseas branches of Indian banks in 2016-17.
6. Foreign banks more than compensated their lower interest income with increase in non-interest income, especially other non-fee income.
7. Overseas branches of Indian banks generated a major share of fee income by rendering credit related services, trade finance related services and derivative, stocks, securities, forex trading services whereas payment and money transmission services generated the highest fee income for foreign banks operating in India.
7. Indian banks' branches in UK generated the highest fee income, followed by those in the UAE and Hong Kong.
