Indian banks abroad report credit growth of 27% in FY12: RBI

Indian banks abroad report credit growth of 27% in FY12: RBI Mumbai: Indian banks operating overseas witnessed higher credit growth of 27 percent in 2011-12 compared with the foreign banks present in India, data from Reserve Bank showed Thursday.

"Growth of credit extended by Indian banks' branches operating abroad increased by 27 percent to Rs 4.45 lakh crore. Credit extended by foreign banks operating in India increased by 21.8 percent to Rs 2.41 lakh crore during 2011-12," RBI said in its survey on International Trade in Banking Services: 2011-12.

Subsidiaries of Indian banks operating abroad credited Rs 53,650 crore during 2011-12, up 16.8 percent from a year ago.

The RBI survey covered 163 overseas branches, 158 overseas subsidiaries of Indian Banks and 309 branches of foreign banks operating in India.

Also, in terms of deposit mobilisation, Indian banks generated funds at a higher rate than foreign banks.

Deposit mobilised by Indian banks' branches operating abroad increased by 27.1 percent during 2011-12 at Rs 2.70 lakh crore. In case of foreign banks operating in India, deposit mobilisation increased by 14.3 percent to Rs 2.75 lakh crore.

But, subsidiaries of Indian banks abroad recorded fall of 4 percent in deposit mobilisation at Rs 49,180 crore, the data showed.

Bahrain, Belgium, Hong Kong, Japan, Singapore, Sri Lanka, UAE, the UK and the US were the major countries that accounted together for nearly 90.8 percent of total trade in banking services of the branches of Indian banks operating abroad.

In terms of employment generation, Indian banks operating abroad employed 66.3 percent from local sources, 30.8 percent from India and remaining 2.9 percent from other countries. In case of foreign banks in India, the share of local employees in total employees was 99.6 percent.

Although number of employees of Indian banks operating abroad increased by 6.1 percent in 2011-12, in case of foreign banks operating in India, number of employees decreased by 2.9 percent, RBI said.

The profitability ratio of Indian banks working abroad decreased to 0.7 percent (from 1.1 percent), the foreign banks in India increased their profitability ratio to 2.4 percent (from 2.3 percent), RBI said.

Indian banks' branches operating abroad generated major share of fee income by rendering credit related services and trade finance related services.

On the other hand, derivative, stock, securities, foreign exchange trading services and financial consultancy and advisory services were major source of fee income for foreign banks operating in India.

"During 2011-12, 309 branches of foreign banks operating in India generated total fee income of Rs 9,430 crore. In case of branches of Indian banks operating outside India, total fee income generated was Rs 6,800 crore," RBI said.

PTI