FOREIGN BANKS IN INDIA

PRESENTED BY: ANJALI SINGH & NITESH KUMAR

Friday 20 February 2009 1
 Introduction
• REFORMS
• ECONOMIC ACTIVITY AND
GROWTH RATE
• GOVERNMENT NORMS
• POTENTIAL FOR ATTRACTIVE
RETURNS
• CUSTOMER SERVICE
• COMPETITIVE
• ACCURATIVE
• LATEST TECHNOLOGY AND
PRACTICES

Friday 20 February 2009 2

 List Of Foreign
Banks
ABN Amro Bank N.V. JP Morgan Chase Bank
Abu Dhabi Commercial Bank Limited Krung Thai Bank Public Company Ltd.
American Express Bank Limited Mashreq bank psc
Antwerp Diamond Bank N.V. MIZUHO Corporate Bank Ltd.
AB Bank Limited Oman International Bank S.A.O.G.
Bank International Indonesia Shinhan Bank
Bank of America NA Societe Generale
Bank of Bahrain and Kuwait B.S.C. Sonali Bank
Bank of Ceylon Standard Chartered Bank
Barclays Bank PLC State Bank of Mauritius Ltd.
BNP Paribas The Bank of Nova Scotia
Chinatrust Commercial Bank The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Citibank N.A. The Development Bank of Singapore Ltd.
Calyon Bank The Hongkong and Shanghai Banking
Deutsche Bank AG Corporation. Ltd.

Friday 20 February 2009 3

 Major Foreign
Banks In India

• STANDARD CHARTERED
• CITIBANK
• HSBC BANK
• ABN-AMRO BANK

Friday 20 February 2009 4

 WTO Agreement
Phase I: March 2005 to March 2009

New banks – First time presence

Minimum start up capital of Rs 3 billion and capital adequacy ratio of 10%

Existing banks – Branch expansion policy

limitation of setting up a maximum of 12 branches per year is to be relaxed and a more liberal policy for under banked areas will be adopted
Conversion of existing branches to wholly owned subsidiaries
Acquisition of shareholding in select Indian private sector banks(74% cap)

Phase II: April 2009 onwards

According ‘full national treatment’ to wholly owned subsidiaries of foreign banks

Dilution of stake in wholly owned subsidiaries
Merger and acquisition of any private sector bank in India

Friday 20 February 2009 5

 Foreign Banks:
Strong Areas
• FOREIGN EXCHANGE
• TREASURY
• CORPORATE LENDING
• PROJECT FINANCING
• INVESTMENT BANKING
• ASSET MANAGEMENT
• CORPORATE FINANCE
• MERGER AND ACQUISITIONS
• OFF-SHORING
• TRADE FINANCE

Friday 20 February 2009 6

 RBI
Regulations
• Compliance with BASEL norms
• Approval of home country regulator
• Good political relations with parent country.
• Financial soundness
• Start up capital of 3 billion and 10%capital adequacy ratio.
• Corporate Governance:
• minimum 50% directors are Indian nationals
• minimum 50% non executive directors
• one third are independent directors

• Compliance to companies act 1956 and RBI act 1934, and Banking
regulation act 1949

Friday 20 February 2009 7

 Challenges
Faced
• PRODUCT CHANGES
• INCREASING COMPETITION
• PARENT BANK STRATEGY
CHANGES
• REGULATORY CHANGES
• STATE OF ECONOMY
• DEVELOPMENT OF
OUTSOURCING MARKET
• INCREASING COMPETITION

Friday 20 February 2009 8

 Competition
• Many new banks expected to
open in 2009
• StanChart, Citibank, and HSBC
have the lions share among the
foreign banks
• Foreign banks bring with them a
variety of expertise, which needs
to be countered by other Indian
Banks.
• 2009 will be crucial in terms of
competitions.

Friday 20 February 2009 9

 THANK YOU!
Friday 20 February 2009 10