International Trade in Banking Services, 2008-09*
Highlights
The survey on International Trade in
Banking Services (ITBS) for 2008-09 was
conducted in continuation of earlier
surveys for 2006-07 and 2007-08 to
obtain the consistent and comparable data
on international trade in banking
services. The coverage extends to 134
overseas branches, 99 overseas subsidiaries
of 14 Indian banks and 289 branches of
29 foreign banks operating in India. The
services are captured based on the explicit
and implicit fees or commission charged
to the customers for financial auxiliaries
services rendered by the banks. The services
covered in the survey are (i) deposit
account management services, (ii) credit
related services, (iii) financial leasing
services, (iv) trade finance related services,
(v) payment and money transmission
services, (vi) fund management services,
(vii) financial consultancy and advisory
services, (viii) underwriting services,
(ix) clearing and settlement services and
(x) derivative, stock, securities and foreign
exchange trading services. Results of the
survey revealed that Indian banks’
branches operating overseas were lagging
behind in generating income by rendering
trade in banking services compared to
foreign banks operating in India. It was
also observed that Indian banks’ branches
operating abroad generated major share
of fee income by rendering credit-related
services and trade finance-related services,
whereas foreign banks in India generated
major share of fee income by rendering
derivative, stock, securities and foreign
exchange trading services.
Introduction
The ongoing negotiations for liberalising
the financial services sector under the
World Trade Organisation (WTO) as a part
of General Agreement on Trade in Services
(GATS), inter alia, necessitated the need of
comparable data on International Trade in
Banking Services. The survey results make
available the basic information on trade in
banking services in India. The current
survey is an effort in meeting comparable
database of international standards for
policy decisions in continuation of surveys
on International Trade in Banking Services
conducted in January 2008 and September
2008 for 2006-07 and 2007-08, respectively.
This article is based on the survey launched
in November 2009 and covers data for 2008-
09. The primary objective of the survey is
to collect disaggregated information relating
to various banking services rendered by the
overseas branches and subsidiaries of
Indian banks as well as the banking services
rendered by the foreign bank branches
operating in India. According to the Manual
on Statistics of International Trade in
Services 2010, Foreign Affiliates Statistics
(FATS) should cover the services rendered
by branches as well as subsidiaries. In the
earlier articles on International Trade in
Banking Services, published in January 2009
and November 2009, the combined data on
International Trade in Banking Services for
branches as well as subsidiaries of Indian
banks operating outside India were
published. In order to provide information
at micro-level, the disaggregated data on
International Trade in Banking Services for
branches as well as subsidiaries of Indian
banks operating outside India are presented
separately. Methodology adopted for conduct of the survey and coverage are
presented in Annex I. A copy of the survey
schedule is given in Annex II.
The article is organised into six sections.
The distribution of branches/subsidiaries/
associates of Indian banks abroad and foreign
banks in India is presented in Section I.
Section II examines the business growth of
Indian banks abroad and foreign banks in
India. The trend in profitability of Indian
banks and foreign banks is discussed in
Section III. Section IV examines the trade in
banking services of Indian banks abroad and
foreign banks in India. Section V presents a
disaggregated activity-wise analysis. A
summary of conclusions drawn, based on
this survey, is presented in Section VI.
Section I
Distribution of Branches of Indian
Banks Operating Abroad and Foreign
Banks Operating in India
Of total 138* branches/offices of Indian
banks operating abroad in 29 countries as at
end March 2009, banks furnished data for
134 Indian overseas branches operating in
28 countries on International Trade in
Banking Services. Of 295** foreign bank
branches operating in India as at end March
2009, the survey covered 289 branches of
foreign banks. Along with the branches,
Indian banks operating abroad also furnished
data for their 99 overseas subsidiaries and
73 overseas associates. A subsidiary is a direct
investment enterprise over which direct investor is able to exercise control. The
control is determined to exist if the investor
has more than 50 per cent equity in the
enterprise investment. An associate is a
direct investment enterprise over which the
direct investor is able to exercise a significant
degree of influence, but not control. A
significance degree of influence is
determined to exist if the direct investor
owns from 10 to 50 per cent of the equity
shares in the investment enterprise. Bank of
Baroda had the largest overseas presence
with 46 branches in 14 countries, followed
by State Bank of India (37 branches in 18
countries) and Bank of India (23 branches in
11 countries). The United Kingdom was
having the highest number of Indian banks’
(24), followed by Hong Kong (15), Singapore
(12), Fiji (9), United Arab Emirates (9),
Mauritius (8) branches and Sri Lanka (7).
Table1 : Details of Employees in Branches of Indian Banks
Operating Abroad and foreign Banks Operating in India |
(` crore) |
Items |
Indian Banks operating abroad |
Annual Growth (%) |
Foreign Banks operating in India |
Annual Growth (%) |
2007-08 |
2008-09 |
2007-08 |
2008-09 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
Number of Branches |
121 |
134 |
10.7 |
273 |
289 |
5.9 |
Number of Employees |
2,629 |
2,919 |
11.0 |
30,159 |
29,824 |
-1.1 |
of which |
|
|
|
|
|
|
Local |
1,740 |
2,004 |
15.2 |
30,062 |
29,741 |
-1.1 |
Indians |
752 |
841 |
11.8 |
NA |
NA |
NA |
Others |
137 |
74 |
-46.0 |
97 |
83 |
-14.4 |
NA : Not Applicable. |
Employment
The details of number of employees
employed in various branches, subsidiaries
and associates of Indian banks operating
abroad and foreign banks operating in India
are given in Table 1, 2 and 3, respectively.
Employees of foreign banks operating in
India contracted by 1.1 per cent in 2008-09
over previous year whereas there was an
increase of 11.0 per cent in the number of
employees in branches of Indian banks
operating outside India in 2008-09.
The foreign banks operating in India
deployed 99.7 per cent local employees of
their total employees from local sources
while the Indian banks operating abroad
employed 68.7 per cent of employees from
local sources, 28.8 per cent from India and
remaining 2.5 per cent from other countries
in 2008-09.
A significant growth was observed in the
number of employees in the subsidiaries and the associates of Indian banks operating
abroad in 2008-09 compared to 2007-08
mainly due to increase in number of the
subsidiaries and the associates. The
subsidiaries of Indian banks overseas
deployed 78.3 per cent of their total
employees from local sources, 20.2 per cent
from India and remaining 1.5 per cent from
other countries whereas 97.7 per cent
employees in associates of Indian banks
outside India were local and 2.3 per cent
from India in 2008-09.
Table 2 : Details of Employees in Subsidiaries of Indian Banks Operating Abroad |
Items |
Indian Banks operating abroad |
Annual Growth (%) |
2007-08 |
2008-09 |
1 |
2 |
3 |
4 |
Number of subsidiaries |
65 |
99 |
52.3 |
Number of Employees |
1,239 |
1,638 |
32.2 |
of which: |
|
|
|
Local |
950 |
1,283 |
35.1 |
Indians |
263 |
331 |
25.9 |
Others |
26 |
24 |
-7.7 |
Table 3 : Details of Employees in Associates of Indian Banks Operating Abroad |
Items |
Indian Banks operating abroad |
Annual Growth (%) |
2007-08 |
2008-09 |
1 |
2 |
3 |
4 |
Number of Associates |
34 |
73 |
114.7 |
Number of Employees |
779 |
1,433 |
84.0 |
of which |
|
|
|
Local |
769 |
1,400 |
82.1 |
Indians |
10 |
33 |
230.0 |
____________
* Table 1.5 of Statistical Tables Relating to Banks in India
2008-09.
** Table 1.1 of Statistical Tables Relating to Banks in
India 2008-09.
Section II
Indian Banks’ Growth in Overseas
Business
The assets/liabilities of Indian banks’
overseas branches increased by 57.8 per cent in 2008-09 as compared to 14.5 per cent in
the previous year (Table 4). The credit
extended and deposits mobilised recorded
a significant growth of 57.5 per cent and 81.4
per cent compared to 41.3 per cent and 22.8
per cent, respectively, in the previous year.
The growth in asset/liabilities of
subsidiaries of Indian banks outside India
was at 25.8 per cent in 2008-09 in contrast
to a contraction of 7.1 per cent in the
previous year (Table 5). The credit extended
and deposits mobilised by the Indian banks’
subsidiaries operating abroad increased
substantially by 102.6 per cent and 31.7 per
cent in the period under review. This sharp
growth in assets/liabilities, credit extended
and deposit mobilised of the Indian banks
operating abroad might be attributed to two
reasons-firstly, depreciation of Indian rupee
compared to major currencies in March 2009
as compared to March 2008 and secondly,
increase in the number of branches/
subsidiaries of Indian banks operating
outside India in 2009.
The share of credit in total assets of
Indian banks’ branches operating abroad
remained at 63.1 per cent compared to 57.6
per cent in case of subsidiaries of Indian
banks operating abroad at end-March 2009.
Table 4: Balance Sheet Items of Indian Banks’ Branches Operating Abroad |
(` crore) |
Item |
As at end-March |
2007 |
2008 |
2009 |
Annual Growth (%)in 2008 Col(4)/ Col(2) |
Annual Growth (%)in 2009 Col(6)/ Col(4) |
Amount |
Per cent to total Assets |
Amount |
Per cent to total Assets |
Amount |
Per cent to total Assets |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
Credit extended |
98,336 |
51.2 |
1,38,930 |
63.2 |
2,18,830 |
63.1 |
41.3 |
57.5 |
Deposits mobilized |
62,715 |
32.6 |
77,028 |
35.0 |
1,39,694 |
40.3 |
22.8 |
81.4 |
Total Assets/ Liabilities |
1,92,083 |
|
2,19,912 |
|
3,47,053 |
|
14.5 |
57.8 |
Table 5: Balance Sheet Items of Indian Banks’ Branches Operating Abroad |
(` crore) |
Item |
As at end-March |
2007 |
2008 |
2009 |
Annual Growth (%)in 2008 Col(4)/ Col(2) |
Annual Growth (%)in 2009 Col(6)/ Col(4) |
Amount |
Per cent to total Assets |
Amount |
Per cent to total Assets |
Amount |
Per cent to total Assets |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
Credit extended |
18,733 |
29.3 |
21,256 |
35.8 |
43,058 |
57.6 |
13.5 |
102.6 |
Deposits mobilized |
41,811 |
65.4 |
37,797 |
63.6 |
49,783 |
66.7 |
-9.6 |
31.7 |
Total Assets/ Liabilities |
63,935 |
|
59,388 |
|
74,693 |
|
-7.1 |
25.8 |
However, the share of deposits mobilised
in total liabilities of Indian banks’ branches
and subsidiaries was at 40.3 per cent and
66.7 per cent respectively, as at end -March
2009.
The shares of business (credit extended
and deposits mobilised) in total assets/
liabilities of overseas branches of Indian
banks which was at 98.2 per cent as at end -
March 2008 increased to 103.4 per cent as at
end-March 2009. In the case of overseas
subsidiaries of Indian banks, the share of
business in total assets/liabilities increased
to 124.2 per cent as at end-March 2009 from
99.4 per cent a year ago. The total assets/
liabilities of branches and subsidiaries of
Indian banks operating outside India
increased sharply to `4,21,746 crore as at end
-March 2009 from `2,79,300 crore as at end-
March 2008 resulting a growth of 51.0 per
cent. Their share of credit in total asset and
deposit in total liabilities increased
marginally by 62.0 per cent and 44.9 per cent
respectively, over the previous period.
Foreign Banks’ Share in Indian
Banking Business
The share of foreign banks’ assets in
total assets of Scheduled Commercial Banks (SCBs) remained at 8.5 per cent as at end-
March 2009.Their share in credit declined
to 5.5 per cent as at end-March 2009 as
compared to 6.5 per cent as at end-March
2008 and also the deposits to 5.3 per cent
from 5.8 per cent in the corresponding
period.
The share of foreign banks’ income in
total income of SCBs increased marginally
from 9.5 per cent to 9.8 per cent during the
period under review, mainly due to increase
in share of non-interest income (from 17.5
per cent to 19.8 per cent). The total assets /
liabilities of foreign banks operating in India
grew by 22.8 per cent as at end-March 2009.
The deposit growth was higher at 12.0 per
cent while the credit grew at 3.0 per cent at
end-March 2009.
Section III
Income and Expenditure
The total income of Indian banks’ branches
operating abroad amounting to `16,739 crore,
registered a growth of 27.7 per cent in 2008-09
(Table 7) as against 29.4 per cent growth in
the income of foreign banks operating in
India. The total interest income of Indian
banks’ branches operating abroad exceeded their total income by `318 crore indicating a
loss in non-interest income. The growth of
interest income of foreign banks was lower
at 23.3 per cent compared to total income
(29.4 per cent) in 2008-09 showing that the
non-interest income increased at a higher
rate. In the case of Indian banks’ branches operating abroad, the non-interest income
indicated a loss of `318 crore for Indian
banks’ branches operating overseas in
contrast to non-interest income of `14,890
crore in case of foreign banks’ branches in
India in 2008-09. Further, the interest
expenses of Indian banks’ overseas branches was higher at `13,030 crore
compared to `12,811 crore of foreign banks
operating in India in the same period.
Table 6: Foreign Banks’ Share in Indian Banking Business |
(` crore) |
Items |
All Scheduled Commercial Banks* |
Foreign Banks Covered in the Survey |
Foreign Banks’ Share in Indian Banking Business (%) |
2007-08 |
2008-09 |
2007-08 |
2008-09 |
2007-08 |
2008-09 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
No. of Reporting Banks |
79 |
80 |
27 |
29 |
27 |
29 |
Assets/Liabilities@ |
43,26,166 |
52,41,331 |
3,64,019 |
4,46,954 |
8.4 |
8.5 |
|
|
|
(33.4) |
(22.8) |
|
|
Credit@ |
24,76,936 |
30,00,906 |
1,60,646 |
1,65,407 |
6.5 |
5.5 |
|
|
|
(29.0) |
(3.0) |
|
|
Deposits@ |
33,20,062 |
40,63,204 |
1,91,015 |
2,13,973 |
5.8 |
5.3 |
|
|
|
(29.6) |
(12.0) |
|
|
Total Income# |
3,68,869 |
4,63,835 |
34,934 |
45,204 |
9.5 |
9.8 |
of which; |
3,08,481 |
3,88,814 |
24,578 |
30,314 |
7.9 |
7.8 |
Interest received, |
|
|
|
|
|
|
Total Expenditure# |
2,85,275 |
3,52,481 |
24,689 |
32,618 |
8.7 |
9.3 |
of which; |
|
|
|
|
|
|
Interest paid |
2,08,000 |
2,63,219 |
10,769 |
12,811 |
5.2 |
4.9 |
Net Interest Margin |
2.58 |
2.62 |
4.33 |
4.31 |
— |
— |
* Source: Statistical Tables Relating to Banks in India: 2008-09.
— : Not applicable.
@ Indicates end-March figures. # Indicates the figures during the period.
Figures in the bracket indicate annual growth in the respective items. |
Table 7: Income and Expenditure of Indian Banks’ Overseas Branches and
Foreign Banks’ Branches in India |
(` crore) |
Items |
Indian Banks Operating Abroad |
Foreign Banks Operating in India |
2007-08 |
2008-09 |
Growth (%) |
2007-08 |
2008-09 |
Growth (%) |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
Income |
13,112 |
16,739 |
27.7 |
34,934 |
45,204 |
29.4 |
Of which; |
|
|
|
|
|
|
Interest Income |
12,601 |
17,057 |
35.4 |
24,578 |
30,314 |
23.3 |
Expenditure |
10,480 |
16,514 |
57.6 |
24,689 |
32,618 |
32.1 |
Of which; |
|
|
|
|
|
|
Interest Expenditure |
10,336 |
13,030 |
26.1 |
10,769 |
12,811 |
19.0 |
Income and Expenditure of subsidiaries
of Indian banks operating outside India
grew at 61.2 per cent and 53.6 per cent,
respectively, in 2008-09 (Table 8). The
growth of interest income/expenses of
subsidiaries of Indian banks was
comparatively low, reflecting higher growth
in their non-interest income as well as noninterest
expenses. The total income and
total expenditure of Indian banks (branches
and subsidiaries) operating outside India
increased by 33.8 per cent and 56.7 per cent,
respectively, in 2008-09 over previous year.
The profitability ratios, viz., income to
total assets, net profits to total income and
net profits to total assets of the Indian banks’
branches operating outside India declined to
4.8 per cent, 1.3 per cent and 0.1 per cent in
2008-09 from 6.0 per cent, 20.1 per cent and
1.2 per cent, respectively, in the preceding
year (Table 9). The total income to total assets
of foreign banks operating in India was at
10.1 per cent, net profits to total income at
27.8 per cent and net profits to total assets
at 2.8 per cent in 2008-09.
Table 8 : Income and Expenditure of
Subsidiaries of Indian Banks Operating Abroad |
(` crore) |
Items |
Indian Banks operating abroad |
2007-08 |
2008-09 |
Growth (%) |
1 |
2 |
3 |
4 |
Income |
29,36 |
4,734 |
61.2 |
Of which; |
|
|
|
Interest Income |
2,796 |
3,920 |
40.2 |
Expenditure Of which; |
2,784 |
4,276 |
53.6 |
Interest Expenditure |
2,216 |
3,005 |
35.6 |
Table 9: Profitability Ratios for Branches |
(Per cent) |
Profitability Ratio |
Indian Banks’ Branches Operating Abroad |
Foreign Banks’ Branches Operating in India |
2007-08 |
2008-09 |
2007-08 |
2008-09 |
1 |
2 |
3 |
4 |
5 |
Income to Total Assets |
6.0 |
4.8 |
9.6 |
10.1 |
Net Profits to Total Income |
20.1 |
1.3 |
29.3 |
27.8 |
Net Profits to Total Assets |
1.2 |
0.1 |
2.8 |
2.8 |
The profitability ratios, viz., income to
total assets, net profits to total income and
net profits to total assets of subsidiaries of
Indian banks operating abroad was at 6.3
per cent, 9.7 per cent and 0.6 per cent,
respectively, in 2008-09 (Table10).
Country-wise Profitability of Indian
Banks’ Branches Operating Abroad
Country-wise return on assets, i.e., net
profit to total assets of Indian banks
operating abroad is presented in Chart 1.
The return on assets of Indian banks
operating in Sri Lanka was the highest at
5.0 per cent in 2008-09, followed by France
(4.8 per cent) and Fiji (2.9 per cent). It
was observed that return on assets of
Indian banks’ overseas branches improved
in 2008-09 over the preceding year in case of Bahrain, Belgium, Fiji, France, Japan,
Mauritius, Thailand and UAE and declined
in case of Hong Kong, Singapore, the UK and
the USA. Due to financial turmoil in the
USA, there was a negative return on assets
(- 4.6 per cent) in 2008-09 compared to 0.8
per cent return in 2007-08.
Table 10: Profitability Ratios of Subsidiaries of
Indian Banks Operating Abroad |
(Per cent) |
Profitability Ratio |
Indian Banks’ Subsidiaries
Operating Abroad |
2007-08 |
2008-09 |
1 |
2 |
3 |
Income to Total Assets |
4.9 |
6.3 |
Net Profits to Total Income |
5.2 |
9.7 |
Net Profits to Total Assets |
0.3 |
0.6 |
Section IV
Trade in Banking Services – Indian
Banks Operating Abroad
According to the Manual on Statistics of
International Trade in Services 2010, the
disaggregated data on services rendered by
overseas branches and subsidiaries of
Indian banks are presented in this section.
The trade in banking services extended
was captured based on explicit and implicit
fees or commissions charged to the
customers for various services rendered by
the branches and subsidiaries of Indian
banks operating abroad. In this survey, the
financial services provided by the banks were
classified into eleven major groups. These
services cover deposit account management
services, credit-related services, financial leasing services, trade finance related
services, payment and money transmission
services, fund management services,
financial consultancy and advisory services,
underwriting services, clearing and
settlement services, ‘derivative, stock,
securities, foreign exchange trading services’
and other financial services. Further details
are given in Annex I.
Activity-wise Trade in Banking
Services
Indian Banks’ Overseas Branches
The fee income generated by rendering
trade in banking services by the Indian
banks’ branches operating abroad increased
by 2.1 per cent to `3,012 crore in 2008-09
from `2,951 crore in 2007-08. Among various
banking services, fee income generated by
Deposit account management services,
Trade finance related services and Payment
and money transmission services recorded
significant growth in 2008-09 over 2007-08
(Table 11). There was a decline in the
income generated by way of credit related
services (22.3 per cent), financial
consultancy and advisory services (38.4 per cent), clearing and settlement services (2.6
per cent), derivative, stock, securities,
foreign exchange trading services (42.9 per
cent) and other financial services (89.1 per
cent) in 2008-09 compared to the previous
year.
Table 11: Composition of Trade in Banking Services – Activity-wise (for Branches) |
(` Lakh) |
Name of Banking Services |
2007-08 |
2008-09 |
Growth (%)In 2008-09 |
1 |
2 |
3 |
4 |
Deposit Account Management Services |
5985 |
8218 |
37.3 |
Credit Related Services |
151909 |
117962 |
-22.3 |
Financial Leasing Services |
0 |
0 |
0.0 |
Trade Finance Related Services |
48373 |
121482 |
151.1 |
Payment and Money Transmission Services |
18795 |
27377 |
45.7 |
Fund Management Services |
0 |
162 |
— |
Financial Consultancy and Advisory Services |
11918 |
7337 |
-38.4 |
Underwriting Services |
0 |
0 |
0.0 |
Clearing and Settlement Services |
1987 |
1936 |
-2.6 |
Derivative, Stock, Securities, Foreign Exchange trading Services |
22990 |
13127 |
-42.9 |
Other Financial Services |
33113 |
3610 |
-89.1 |
Total |
295070 |
301212 |
2.1 |
None of the overseas branch as of Indian
banks generated any fee income from financial leasing services and underwriting
services in 2008-09.
Indian Banks’ Overseas Subsidiaries
Subsidiaries of Indian banks operating
abroad registered a remarkable growth of
140.1 per cent in the fee income generated
by rendering trade in banking services in 2008-09 over previous year (Table 12). As in
the case of Indian banks’ branches,
subsidiaries of Indian banks operating abroad
also generated most of their fee income by
rendering services like credit related services
and trade finance related services. In
addition, subsidiaries of Indian banks
operating abroad also render ‘financial
consultancy and advisory services’ and other
financial services as a major services.
Table12: Composition of Trade in Banking Services – Activity-wise (for Subsidiaries) |
(` Lakh) |
Name of Banking Services |
2007-08 |
2008-09 |
Annual Growth (%) In 2008-09 |
1 |
2 |
3 |
4 |
Deposit Account Management Services |
949 |
1,170 |
23.2 |
Credit Related Services |
37,835 |
20,956 |
-44.6 |
Financial Leasing Services |
0 |
0 |
0.0 |
Trade Finance Related Services |
597 |
15,549 |
2,505.6 |
Payment and Money Transmission Services |
1,557 |
10,715 |
588.0 |
Fund Management Services |
8 |
0 |
-100.0 |
Financial Consultancy and Advisory Services |
5,431 |
12,569 |
131.4 |
Underwriting Services |
5 |
0 |
-100.0 |
Clearing and Settlement Services |
13 |
82 |
522.2 |
Derivative, Stock, Securities, Foreign Exchange trading Services |
4,385 |
-74,003 |
-1,787.7 |
Other Financial Services |
978 |
1,37,226 |
13,928.2 |
Total |
51,760 |
1,24,263 |
140.1 |
Indian banks (branches and subsidiaries)
operating abroad generated major share of
their fee income by rendering credit related
services, trade finance related services,
deposit account management services,
‘payment and money transmission services’
and ‘financial consultancy and advisory
services’. The fee income generated by Indian
banks (branches and subsidiaries) operating
in other countries increased by 22.7 per cent
in 2008-09 over 2007-08.
Trade in Banking Services by Indian
Banks Operating Abroad – Residents
and Non-Residents
Indian Banks’ Overseas Branches
The fee income generated through
banking services to residents increased to
`1,132 crore in 2008-09 from `975 crore in
2007-08, being one-third of total fee-based
income (Table 13). The fee income generated
by rendering the banking services to
residents grew at higher rate than from the
services to non-residents.
The share of fee income derived from
residents increased marginally in 2008-09
(37.6 per cent) as compared to the previous year (33.0 per cent), while the share of fee
income from non-residents decreased
correspondingly (Chart 2). However, the
share of fee income from non-residents (in
India) improved and constituted 36.9 per
cent of total fee income in 2008-09 as
compared to 24.4 per cent in the previous
year. In contrast, the fee income generated
from non-residents of other countries
declined and accounted for 25.5 per cent to
total fee-based income in 2008-09 compared
to 42.6 per cent in 2007-08.
Table 13: Trade in Banking Services
(Fee Income) by Indian Banks’ Branches
Abroad -Residents and Non-Residents |
(` Crore) |
Items |
2007-08 |
2008-09 |
Growth(%) in 2008-09 |
1 |
2 |
3 |
4 |
Residents |
975 |
1,132 |
16.1 |
Non-Residents, |
1,975 |
1,881 |
-4.8 |
of which |
|
|
|
In India |
718 |
1,113 |
54.9 |
In Other Countries |
1,257 |
768 |
-38.9 |
Total Trade in Banking Services (Fee Income) |
2,950 |
3,012 |
2.1 |
Table 14: Trade in Banking Services
(Fee Income) by Indian Banks Subsidiaries
Abroad-Residents and Non-Residents. |
(` Crore) |
Items |
2007-08 |
2008-09 |
Annual Growth (%) in 2008-09 |
1 |
2 |
3 |
4 |
Residents |
214 |
808 |
277.7 |
Non-Residents, |
304 |
435 |
43.1 |
| of which |
|
|
|
In India |
176 |
75 |
-57.5 |
In Other Countries |
128 |
360 |
181.5 |
Total Trade in Banking Services (Fee Income) |
518 |
1243 |
140.1 |
Indian Banks’ Overseas Subsidiaries
The subsidiaries of Indian banks
operating outside India generated twothirds
of their total fee income from
residents while Indian banks’ branches
operating outside India generated twothirds
of their total income by rendering
service to non-residents in 2008-09. The fee
income of subsidiaries of Indian banks
operating outside India from residents
recorded four fold increases in 2008-09 over
the previous year. Among non-residents,
Indian banks subsidiaries generated 29.0 per
cent of their fee income by rendering
services to non-residents in other countries
while branches of Indian banks received
25.5 per cent of their fee income from nonresidents
in India (Chart 2 & 3).
The Indian banks (branches and
subsidiaries) operating abroad, in total,
generated 54.4 per cent of their fee income
by rendering services to non-residents and
remaining 45.6 per cent from residents, in
2008-09.
Country-wise Trade in Banking
Services – Indian Banks’ Branches and
Subsidiaries Operating Abroad
Bahrain, the UK, Singapore, the US, Hong
Kong, the UAE, Belgium, Japan and Sri Lanka
were the major countries which accounted
together for 89.3 per cent to total trade in
banking services of the branches of Indian
banks operating abroad in 2008-09 (Table 15).
Bahrain had the largest share at 19.6 per cent
in total fee income generated from trade in
banking services, followed by the UK (16.4
per cent), Singapore (14.5 per cent), the US
(12.6 per cent) and Hong Kong (11.8 per cent)
in 2008-09.
The UK, Botswana, Canada and Russia
were the major countries which accounted
for 94.5 per cent to total trade in banking
services of the subsidiaries of the Indian
banks operating abroad in 2008-09 (Table 16).
Accrual of Amounts to India due to Fee
Income Generated through Trade in
Banking Services
The amount accrued to India by Indian
banks’ operations in various countries was at `4,255 crore in 2008-09. Of which, `3,012
crore (70.8 per cent) fee income was
generated by 134 branches of Indian banks operating outside India and remaining `1,243
crore (29.2 per cent) by 99 subsidiaries of
Indian banks operating abroad.
Table 15: Trade in Banking Services – Country-wise Classification for
Overseas Branches of Indian Banks |
(` Lakh) |
Country |
Trade in Banking Services |
Total |
DAM |
CRS |
TFR |
PMT |
DER |
Other Services |
All Services |
2007-08 |
2008-09 |
2007-
08 |
2008-
09 |
2007-08 |
2008-
09 |
2007-08 |
2008-09 |
2007-08 |
2008-09 |
2007-08 |
2008-09 |
2007-
08 |
2008-
09 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
14 |
15 |
Bahrain |
61 |
-50 |
23,619 |
25,678 |
433 |
24,226 |
56 |
0 |
4,941 |
1,827 |
11,918 |
7,337 |
41,029 |
59,017 |
BELGIUM |
167 |
623 |
4,293 |
1,206 |
2,618 |
10,177 |
956 |
1,148 |
0 |
0 |
0 |
0 |
8,034 |
13,154 |
Hong Kong |
311 |
411 |
6,962 |
10,184 |
4,340 |
19,457 |
1,691 |
686 |
6,040 |
2,770 |
0 |
1,946 |
19,344 |
35,454 |
Japan |
30 |
4 |
733 |
7,228 |
1,507 |
2,016 |
338 |
284 |
0 |
1,953 |
2,026 |
116 |
4,634 |
11,601 |
Singapore |
131 |
42 |
62,507 |
30,504 |
12,981 |
14,129 |
470 |
2,232 |
3,965 |
-6,204 |
9,702 |
2,888 |
89,755 |
43,591 |
Sri Lanka |
868 |
169 |
19,891 |
35 |
409 |
252 |
22 |
11 |
0 |
0 |
272 |
138 |
21,462 |
605 |
UAE |
2,213 |
4,713 |
1,160 |
1,361 |
3,361 |
9,143 |
267 |
516 |
1,598 |
2,342 |
0 |
0 |
8,599 |
18,076 |
UK |
466 |
931 |
12,957 |
25,669 |
10,087 |
14,893 |
1,519 |
4,361 |
773 |
3,616 |
0 |
0 |
25,803 |
49,470 |
USA |
143 |
7 |
6550 |
12,362 |
4,554 |
17,261 |
5,074 |
6,857 |
1,188 |
1,603 |
0 |
0 |
17,510 |
38,089 |
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Countries |
1,595 |
1,367 |
13,236 |
3,736 |
8,083 |
9,928 |
8,401 |
11,281 |
4,485 |
5,221 |
23,099 |
621 |
58,898 |
32,154 |
Total |
5,985 |
8,218 |
1,51,909 |
1,17,962 |
48,373 |
1,21,482 |
18,795 |
27,377 |
22,990 |
13,127 |
47,018 |
13,045 |
2,95,070 |
3,01,212 |
DAM : Deposit Account Management Services. CRS : Credit Related Services.
TFR : Trade Finance Related Services. PMT: Payment & Money Transmission Services.
DER : Derivative, Stock, Securities, Foreign Exchange Trading services.
NA Bank/ Branch is not operating |
Table 16 : Trade in Banking Services – Country-wise Classification for
Overseas Subsidiaries of Indian Banks |
(`Lakh) |
Country |
Trade in Banking Services |
Total |
DAM |
CRS |
TFR |
PMT |
DER |
Other Services |
All Services |
2007-08 |
2008-09 |
2007-08 |
2008-09 |
2007-08 |
2008-09 |
2007-08 |
2008-09 |
2007-08 |
2008-09 |
2007-08 |
2008-
09 |
2007-
08 |
2008-
09 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
14 |
15 |
Botswana |
0 |
0 |
18 |
99 |
0 |
13,433 |
254 |
9,681 |
183 |
9,739 |
0 |
0 |
455 |
32,952 |
Canada |
149 |
116 |
1,534 |
2,272 |
116 |
125 |
121 |
45 |
1,165 |
-88,754 |
5,431 |
1,12,099 |
8,516 |
25,904 |
Russia |
33 |
4 |
2,211 |
2,437 |
63 |
26 |
182 |
363 |
62 |
40 |
164 |
127 |
2,715 |
2,997 |
United Kingdom |
23 |
0 |
32,895 |
14,788 |
3 |
1,249 |
498 |
0 |
1,270 |
2,028 |
0 |
37,482 |
34,688 |
55,546 |
Other Countries |
744 |
1,050 |
1,177 |
1,359 |
415 |
715 |
503 |
626 |
1,705 |
2,944 |
841 |
169 |
5,385 |
6,864 |
Total |
949 |
1,170 |
37,835 |
20,956 |
597 |
15,549 |
1,557 |
10,715 |
4,385 |
-74,003 |
6,436 |
1,49,877 |
51,760 |
1,24,263 |
DAM : Deposit Account Management Services. CRS : Credit Related Services.
TFR : Trade Finance Related Services. PMT: Payment & Money Transmission Services.
DER : Derivative, Stock, Securities, Foreign Exchange Trading services.
NA Bank/Branch is not operating |
Table17: Accrual of Amounts to Indian by
Indian Banks Operating Abroad |
(` Lakh) |
Country |
2007-08 |
2008-09 |
Number of branches/ Offices |
Accruals to India |
Number of branches/ Offices |
Accruals to India |
1 |
2 |
3 |
4 |
5 |
Afghanistan |
1 |
226 |
1 |
140 |
Australia |
1 |
912 |
1 |
1,243 |
Bahamas Island |
2 |
916 |
2 |
156 |
Bahrain |
4 |
41,029 |
4 |
59,017 |
Bangladesh |
4 |
15,506 |
4 |
7,202 |
Belgium |
3 |
8,034 |
3 |
13,154 |
Botswana |
2* |
455 |
2* |
32,952 |
Canada |
16* |
11,104 |
10* |
25,904 |
Cayman Islands |
1 |
22,433 |
1 |
1,397 |
China |
2 |
360 |
4 |
1,568 |
Fiji |
9 |
1,455 |
8 |
1,017 |
France |
2 |
2,767 |
2 |
3,717 |
Germany |
1 |
2,682 |
1 |
6,217 |
Ghana |
1* |
0 |
1* |
24 |
Guyana |
1* |
123 |
1* |
149 |
Hong Kong |
12 |
19,344 |
15 |
35,454 |
Indonesia |
9* |
0 |
14* |
145 |
Israel |
1 |
0 |
1 |
0 |
Japan |
4 |
4,634 |
4 |
11,601 |
Channel Islands |
|
NA |
1 |
2,030 |
Kenya |
4+7* |
572 |
4+8* |
1,890 |
South Korea |
1 |
0 |
1 |
0 |
Maldives |
1 |
7,181 |
3 |
3,585 |
Mauritius |
8 |
1,730 |
6 |
501 |
Nepal |
|
0 |
33* |
695 |
Oman |
1 |
257 |
4 |
996 |
Russia |
7* |
2,715 |
3* |
2,997 |
Seychelles |
1 |
272 |
1 |
995 |
Singapore |
9 |
89,755 |
13 |
43,591 |
South Africa |
3 |
617 |
3 |
96 |
Sri Lanka |
7 |
21,462 |
7 |
605 |
Tanzania |
2* |
101 |
2* |
873 |
Thailand |
1 |
212 |
1 |
246 |
Trinidad and Tobago |
1* |
27 |
1* |
26 |
Uganda |
10* |
3,349 |
10* |
4,111 |
UAE |
9 |
8,599 |
7 |
18,076 |
UK |
23+9* |
60,492 |
24+14* |
1,05,017 |
USA |
6 |
17,510 |
8 |
38,089 |
Total including subsidiaries and branches |
121+65* |
3,46,829 |
134+99* |
4,25,475 |
Total of overseas branches excluding subsidiaries |
121 |
2,95,070 |
134 |
3,01,212 |
* Subsidiaries |
Section V
Comparison of Trade in Banking
Services – Indian Banks’ Branches
Operating
Abroad vis-à-vis Foreign
Banks’ Branches Operating in India
A comparative analysis revealed that
foreign banks branches operating in India
were ahead of overseas Indian banks
branches in generating fee income from
providing the services. The total fee income
generated by 289 branches of the foreign
banks operating in India was `10,548 crore
whereas 134 overseas branches of the
Indian banks generated only `3,012 crore in
2008-09 (Chart 4).
Comparison of Trade in Banking
Services - Activity-wise
Indian banks operating abroad
generated major share of fee income by
rendering services activity viz., credit
related services, trade finance related
services, payment and money transmission
services and ‘derivative, stock, securities,
foreign exchange trading services’ together
accounted for 93.0 per cent of total services
whereas in the case of foreign banks
operating in India ‘derivative, stock,
securities, foreign exchange trading
services’, trade finance related services,
‘financial consultancy and advisory
Services’ and credit related ser vices
together accounted for 70.9 per cent share
to total trade in banking services in 2008-
09. The share of payment and money
transmission services in total fee income,
for Indian banks as well as for foreign
banks, increased marginally in 2008-09
(Table 18). In case of Indian banks operating outside India, the share of trade
finance related services increased to 40.3
per cent in 2008-09 from 16.4 per cent in
previous period whereas their share in
credit related services decreased to 39.2 per
cent from 51.5 per cent in the
corresponding period. Indian banks
operating abroad had not derived any fee
income by rendering financial leasing
services during the period under study, i.e.,
2007-08 and 2008-09.
 |
Composition of Trade in Banking
Services According to Residents and
Non- Residents
A notable contrast in generation of fee
income from residents and non-residents
was observed between Indian banks
operating abroad and foreign banks
operating in India (Table 19).
The overseas branches of Indian banks
derived major share of fee income (62.4 per cent) by making available services to nonresidents
while foreign banks operating in
India generated 6.7 per cent in 2008-09.
Foreign banks operating in India generated
93.3 per cent of fee income by rendering
banking services to residents compared to
37.6 per cent by Indian banks’ overseas
branches in 2008-09.
Table 18: Composition of Trade in Banking Services |
(Per cent) |
Activity |
Indian Banks operating Abroad |
Foreign Banks operating in India |
2007-08 |
2008-09 |
2007-08 |
2008-09 |
1 |
2 |
3 |
4 |
5 |
Deposit Account Management Services |
2.0 |
2.7 |
5.0 |
2.8 |
Credit Related Services |
51.5 |
39.2 |
6.7 |
8.4 |
Financial Leasing Services |
0.0 |
0.0 |
0.0 |
0.9 |
Trade Finance Related Services |
16.4 |
40.3 |
16.5 |
17.7 |
Payment and Money Transmission Services |
6.4 |
9.1 |
5.0 |
7.0 |
Fund Management Services |
0.0 |
0.1 |
4.9 |
3.1 |
Financial Consultancy and Advisory Services |
4.0 |
2.4 |
8.8 |
9.6 |
Underwriting Services |
0.0 |
0.0 |
0.6 |
0.8 |
Clearing and Settlement Services |
0.7 |
0.6 |
1.0 |
3.4 |
Derivative, Stock, Securities, Foreign Exchange trading Services |
7.8 |
4.4 |
34.1 |
35.2 |
Other Financial Services |
11.2 |
1.2 |
17.4 |
11.1 |
All activities |
100.0 |
100.0 |
100.0 |
100.0 |
Table 19: Composition of Fee Income Generated from Trade in Banking Services |
(Per cent) |
Indian Banks |
2007-08 |
2008-09 |
Foreign Banks |
2007-08 |
2008-09 |
1 |
2 |
3 |
4 |
5 |
6 |
Residents |
33.0 |
37.6 |
Residents |
95.1 |
93.3 |
Non-Residents |
67.0 |
62.4 |
Non-Residents |
4.9 |
6.7 |
of which; |
|
|
|
|
|
To India |
24.4 |
36.9 |
|
|
|
To other countries |
42.6 |
25.5 |
|
|
|
The reason for contraction of fee income
(4.78 per cent) generate by Indian banks’
overseas branches from non-residents is
mainly due to negative growth in the
services provided to countries other than
India in 2008-09. A decline in fee income
from non-residents by Indian banks
operating outside India may be due to the
financial problems in the global market.
Comparison of Accrual of Amounts to
India and Abroad by Rendering Trade
in Banking Services
The amount accrued to India by
operations of 134 branches of Indian banks
in 28 countries was at `3,012 crore in 2008-09
compared to `10,548 crore to other countries
(excluding India) by their banks’ branches
operating in India. The amount accrued to
India was more than the amount accrued
to foreign countries like Bahrain,
Bangladesh, Belgium, Japan, Singapore, Sri
Lanka, the UAE etc., during 2008-09,
whereas the amount accrued to other
countries was higher than the amount
accrued to India in case of the USA, the UK,
Hong Kong, Germany, Oman, France etc.
Further, the fee income generated by 47
branches of Hong Kong-based banks
operating in India was `2,504 crore whereas
15 branches of Indian banks operating in
Hong Kong was just `355 crore in 2008-09.
Similarly, there were 95 branches of UK
originating banks operating in India with fee
income of `2,115 crore as compared with `495
crore emanating from 24 branches of Indian
originating banks operating in UK. As
compared to 47 branches of the US-based
banks operating in India with a fee income of
`3,962 crore, Indian banks operating in the
US through their 4 branches could generate
` 380 crore in 2008-09.
Table 20: Accrual of Amounts to India and to Abroad |
(` Lakh) |
Country |
Foreign Banks' Branches Operating in India |
Indian Banks' Branches Operating Abroad |
Number of Branches |
Accruals to Abroad |
Number of Branches |
Accruals to India |
2007-08 |
2008-09 |
2007-08 |
2008-09 |
2007-08 |
2008-09 |
2007-08 |
2008-09 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
Bahrain |
2 |
2 |
291 |
362 |
4 |
4 |
41,028.8 |
59,017.5 |
Bangladesh |
3 |
3 |
373 |
468 |
4 |
4 |
15,505.6 |
7,202.3 |
Belgium |
1 |
1 |
768 |
1,322 |
3 |
3 |
8,034.3 |
13,153.9 |
Canada |
5 |
5 |
1,792 |
8,336 |
— |
NA |
NA |
NA |
France |
16 |
16 |
16,132 |
20,780 |
2 |
2 |
2,766.9 |
3,716.6 |
Germany |
10 |
13 |
38,802 |
43,024 |
1 |
1 |
2,681.9 |
6,216.9 |
Hong Kong |
47 |
47 |
2,01,518 |
2,50,379 |
12 |
15 |
19,344.0 |
35,454.3 |
Japan |
5 |
5 |
5,434 |
3,018 |
4 |
4 |
4,634.1 |
11,601.3 |
Mauritius |
3 |
3 |
30 |
266 |
8 |
6 |
1,729.7 |
501.3 |
Netherlands |
28 |
30 |
66,157 |
57,615 |
— |
NA |
NA |
NA |
Oman |
2 |
2 |
3 |
28,429 |
1 |
4 |
256.5 |
995.9 |
Singapore |
2 |
10 |
3,646 |
31,131 |
9 |
13 |
89,755.5 |
43,591.0 |
South Korea |
2 |
2 |
129 |
360 |
1 |
1 |
— |
— |
Sri Lanka |
1 |
1 |
26,952 |
309 |
7 |
7 |
21,462.3 |
604.7 |
Switzerland |
0 |
1 |
NA |
— |
NA |
NA |
NA |
NA |
Taiwan |
1 |
1 |
134 |
155 |
NA |
NA |
NA |
NA |
Thailand |
1 |
1 |
— |
48 |
1 |
1 |
212.0 |
245.6 |
UAE |
4 |
4 |
84,155 |
1,024 |
9 |
7 |
8,598.9 |
18,075.8 |
UK |
95 |
95 |
1,76,308 |
2,11,509 |
23 |
24 |
60,491.8 |
49,470.3 |
USA |
45 |
47 |
2,74,742 |
3,96,220 |
6 |
4 |
17,510.0 |
38,089.3 |
Total |
273 |
289 |
8,97,365 |
10,54,755 |
95 |
100 |
2,94,012.3 |
2,87,936.7 |
NA: Bank/ Branch is not operating. — : Nil. |
Section VI
Conclusions
A survey on international trade in
banking services was conducted among
foreign banks operating in India and Indian
banks having presence abroad. In all, 134
branches and 99 subsidiaries of 14 Indian
banks operating abroad and 289 branches
of 29 foreign banks operating in India had
responded to the survey.
The UK was having the highest number
of Indian banks’ branches (24 of five Indian
banks), followed by Hong Kong (15),
Singapore (12), Fiji (9), the UAE (9) Mauritius (8), and Sri Lanka (7). The foreign banks
operating in India employed 99.7 per cent
of their employees from locally available
sources while the Indian banks’ branches
operating abroad recruited 68.7 per cent of
employees from local sources. The
subsidiaries of Indian banks operating
outside India employed 78.3 per cent of
their employees from local sources.
The amount accrued to India by Indian
banks’ operations in various countries was
at `4,255 crore in 2008-09. Out of `4,255
crore, `3,012 crore (70.8 per cent) fee income
was generated by 134 branches of Indian
banks operating outside India and remaining `1,243 crore (29.2 per cent)
belongs to 99 subsidiaries of Indian banks
operating abroad. Further, the fee income
generated by the Indian banks’ branches
operating abroad increased by 2.1 per cent
from `2,950 crore in 2007-08 to `3,012 crore
in 2008-09, of which 93.0 per cent of fee
income was by rendering banking services
like credit related services, trade finance
related services, derivative, stock, securities,
foreign exchange trading services and
payment & money transmission services. In
contrast to a small growth of 2.1 per cent by
Indian banks branches operating outside
India, a sharp growth of 140.1 per cent has
been observed in the fee income generated
by rendering trade in banking services by
subsidiaries of Indian banks operating
abroad in 2008-09.
A comparative analysis between the
branches of Indian banks operating abroad
and foreign banks operating in India
revealed that during 2008-09, the total fee
income generated by the foreign banks
operating in India, by rendering banking services was significantly higher at `10,548
crore than that of Indian banks’ branches
operating abroad which generated only
`3,012 crore of fee income. Indian banks
generated major share of fee income by
rendering banking services to non-residents
while foreign banks generated major share
of fee from residents. Foreign banks
operating in India generated 93.3 per cent
of fee income by rendering banking services
to residents during 2008-09.
Bahrain, the UK, the USA, Hong Kong,
the UAE, Belgium, and Japan were the major
countries having witnessed not only the
significant share in trade in banking services
by the Indian banks but also had seen
significant growth in trade in banking
services in 2008-09 over 2007-08.
The fee income generated by 47
branches of Hong Kong based banks operating
in India was `2,503 crore in 2008-09 compared
to the fee income at `355 crore of 15
branches of Indian banks operating in Hong
Kong.
Annex I
Methodology
Financial services, particularly banking
services, play an important role in
promoting global, regional and bilateral
economic integration. Banking services
includes acceptance of deposits and lending
(the core banking services), and the other
financial services (para-banking services)
like payment services, securities trading,
asset management, financial advice,
settlement and clearing service, etc. With
the improvements in economic integration
of financial markets and activities, the
international trade in banking services has
significantly increased.
The GATS framework envisages that the
delivery of any commercial services can be
through four different modes viz., Mode 1
–cross border service, Mode 2 –
Consumption abroad, Mode 3 – commercial
presence and Mode 4 – movement of
natural persons. In Mode 3, the bank has a
commercial presence in the territory of the
service-importing country and the service
is delivered therein. The commercial
presence can be through various investment
vehicles like representative offices,
branches, subsidiaries, associates and
correspondents.
Banking services covered in this survey
includes financial auxiliary services such as
(i) deposit account management services,
(ii) credit related services, (iii) financial
leasing services, (iv) trade finance related
services, (v) payment and money
transmission services, (vi) fund management
services, (vii) financial consultancy and
advisory services, (viii) underwriting services, (ix) clearing and settlement services,
and (x) derivative, stock, securities and
foreign exchange trading services. While
carrying out the banking business, banks
cater to the financial services need of the
residents of the country of operation as well
as non-residents of that country. Keeping this
in view, the survey also collected the
information with bifurcation of financial
services rendered to residents and nonresidents
separately.
Details of Services Covered are :
-
Deposit Account Management
Services include fees and
commissions charged to or received
from the deposit account holders, for
maintaining deposit accounts such as
fee for cheque book, fee for internet
banking, commission on draft and
other instrument provided, penalty for
not maintaining minimum balance,
etc. and any other fees charged to
deposit account holders.
-
Credit Related Services include fees
received for credit-related or lending
related services like credit processing
fees, late payment or default charges
and early redemption charges. Charges
for facility and management fees, fees
for renegotiating debt terms, mortgage
fees, etc. also to be reported here.
-
Financial Leasing Services include fees
or commission received for arranging or
entering into financial lease contracts.
This also includes fees received directly
or deducted from the proceedings.
-
Trade Finance Related Services include
commission or fees charged for
arranging trade finance like buyers’ and
suppliers’ credit, fees for establishing/
originating, maintaining or arranging
standby letters of credit, letter of
indemnity, lines of credit, fees for
factoring services, bankers acceptance,
issuing financial guaranty, commitment
fees, handling charges for trade bills.
-
Payment and Money Transmission
Services include fees or charges for
electronic fund transfer services like
SWIFT, TT, wire transfer, etc. ATM
network Services, annual credit/debit
card fees, Interchange charges, fees for
point of services, etc. also have to be
reported here. further, charges on the
customer for making remittances
abroad or receiving remittances from
abroad have to be reported here.
-
Fund Management Services include fee
or income received for managing or
administering financial portfolios, all
forms of collective investment
management, pension fund
management, custodial, depository and
trust services. commission or fees for
safe custody of shares/equities,
transaction fee for custodian account,
communication cost or any other fees/
charges related to custodian account
should also be reported.
-
Financial Consultancy and Advisory
Services include fees for advisory,
intermediation and other auxiliary
financial services including credit reference and analysis, portfolio
research and advice, advice on mergers
and acquisitions and on corporate
restructuring and strategy.
Arrangement/management fees for
private placement of share/ equities are
also to be included.
-
Underwriting Services include
underwriting fees, earning from buying
and reselling an entire or substantial
portion of newly issued securities.
-
Clearing and Settlement Services include settlement and clearance
services for financial assets, including
securities, derivative products, and
other negotiable instruments.
-
Derivative, Stock, Securities, Foreign
Exchange Trading Services include
commissions, margin fees, etc. received
for carrying out financial derivative
transactions, placement services, and
redemption fees. Earnings received on
banks’ own account as well as on behalf
of customers for carrying out foreign
exchange trading has to be reported
under this item. Explicit brokerage fees
and commissions for foreign exchange
brokerage services are also to be
reported. Earnings received on banks’
own account for carrying out trading in
derivative, stock, securities etc. should
not be reported.
A Technical Group on Statistics for
International Trade in Banking Services (TGSITBS)
was set up by the Reserve Bank of
India including members from Ministry of Finance, Ministry of Commerce and various
departments (Department of Economics
and Policy Reasearch, Department of
Banking Operations & Development and
Department of Statistics and Information
Management) of the Bank.
The TG-SITBS, after examining the
different data sources available in the
Reserve Bank, recommended collection of
activity-wise international trade in services
through annual surveys and suggested that
initially the data may be collected on
banking services from foreign banks
operating in India and Indian banks having
operations abroad. The TG-SITBS also
recommended that a suitable questionnaire
with explanatory notes should be prepared/
framed in consultation with the banks and
suggested for conducting annual survey for
the financial year 2006-07 by June 2007.
Accordingly, a survey schedule was prepared
after detailed discussions with the major
foreign banks operating in India and Indian
banks functioning abroad.
The two surveys on ‘International Trade
in Banking Services’ were launched by the
Bank in January 2008 and September 2008 and the findings based on these surveys were
published in the monthly bulletin of January
2009 and November 2009 respectively.
Coverage
The questionnaire was forwarded to
(i) all Indian banks having business abroad
and (ii) all foreign bank branches operating
in India. In all, 14 Indian banks operating
abroad and 29 foreign banks operating in
India responded to the survey. Based on the
response, the coverage of foreign banks in
India in terms of total assets, credit
extended and deposits received was around
99.95 per cent, 99.99 per cent and 99.95 per
cent, respectively.
Coverage of the Survey as at end-March 2009 |
(` crore) |
Item |
Foreign Banks operating in India* |
Foreign Banks covered in the Survey |
Coverage (%) |
Number of Reporting Banks |
31 |
29 |
|
Total assets |
4,47,149 |
4,46,954 |
99.95 |
Credit extended |
1,65,415 |
1,65,407 |
99.99 |
Deposits received |
2,14,077 |
2,13,973 |
99.95 |
* Source: Statistical Tables Relating to Banks in India: 2008-09. |
*
Prepared in the Balance of Payments Statistics
Division, Department of Statistics and Information
Management. The previous article on the subject for the
period 2007-08 was published in November 2009 issue
of the Bulletin.
|