Write-up on NRI Banking

Background:-

Government of India introduced in 1970 Non-Resident(External) Account with a view to attract the savings and other remittance into India through banking channels from the people of Indian Nationality / Origin who are residing abroad and bolster the balance of payment position. The three basic deposit types are:- NRE (Non Resident External Accounts), NRO (Non Resident Ordinary Accounts) and FCNR ( Foreign Currency Non Resident Accounts.

Objectives:-

We will also look into the business model in NRI banking. The NRI business has been modelled around the NRI lifecycle approach that clearly segments the migrant cycle and aligns very specific products and services to it. This lifecycle stage approach was the first in the industry for the NRI business We will also look into the revenue and cost factor in NRI banking. Revenue from one NRI customer is much greater that of a local customer, adding the cost of servicing a customer is also very low as the NRI clients are not "branch-dependent" and tend to actively use digital media platforms.We will also look into who is an NRI customer and what are his characteristics. We will cover various trends NRI banking has followed over the years. Properties of NRI deposits like effects of economic and political downturns, seasonality, interest rate relation with libor, etc. Impact of deregulation of interest rates by RBI on NRI deposits. Relation between NRI deposits and exchange rate movements.

Coverage:-

ICICI bank has won several awards for its NRI banking and we will be covering the various services offered by ICICI in this segment. We will cover the business model followed by ICICI and their revenue and costs in such a business. This includes the various savings account, fixed account and some special accounts offered to the NRI like student plus plan. Life insurance and general insurance schemes offered to NRI. Investment schemes offered to NRI like Portfolio Investment Scheme. Loans against FD and home loan given to NRI. Various options of money transfer given to NRI.

Methodology:-

We would be relying on various secondary sources of data like RBI reports on NRI banking, various studies and research done in the area of NRI banking . We will also try to do an interview of a bank official who has worked in this field and knows about the various issues involved in NRI banking.