Munich Personal RePEc Archive

Foreign Banks operating in India with specific business practices models and their Scenario Post RBI Road Map 2005

Edurkar, Ashok and Shaikh, Dr.Atik Asgar (2016): Foreign Banks operating in India with specific business practices models and their Scenario Post RBI Road Map 2005.

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Abstract

-During the last two decades, India has seen an unprecedented degree of globalization especially in financial services. At present the cross border financial flows have increased dramatically. Many foreign banks from both developed and developing countries have ventured abroad and established their presence in other countries with specific business practices models. Foreign trade, financial system, technological advances, deregulation impact, industry and its major players’ growth were identified as industry shaping milestones that gradually formed the present business practices models of foreign banks. As of March 2013, there are 43 foreign banks from 26 countries operating as branches and 43 foreign banks from 22 countries operating as representative offices in India. In addition, a number of foreign banks have also entered India via the Non-Banking Financial Company (NBFC) route, while a considerable number have set up captive centers in the country. Foreign banks present in India as representative offices often have correspondent banking relationships with domestic banks and provide a useful platform for foreign banks to access opportunities for foreign currency lending to Indian corporate and financial institutions with the application of specific business practices models. Foreign banks have less than 1% of the total branch network but about 7% of the total financial sector assets and a sizeable 11% of profits. With 334 branches in all, the share of FFIs branches is less than 1%.

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