Survey on International Trade in Banking Services, 2020-21
Today, the Reserve Bank released the results of 2020-21 round of the survey on International Trade in Banking Services (ITBS). This annual survey, inter-alia, focuses on cross-border fund-based banking services (e.g., deposits, credit) as well as financial auxiliary services with explicit / implicit fees / commissions charged to customers (details of these services are given in the Annex). The survey covers foreign branches of Indian banks and their overseas subsidiaries / joint ventures as well as foreign banks operating in India.
Highlights
- Foreign banks expanded their branch network and employee base in India marginally whereas overseas staff strength and number of branches of Indian banks and their subsidiaries recorded some decline during 2020-21 (Table 1).
- The consolidated balance sheet of overseas branches of Indian banks expanded despite outflow of deposits and reduction in credit during 2020-21, which indicates a larger role of borrowing and investment portfolios in their business expansion (Table 2); due to disruptions from the COVID-19 pandemic, credit by other bank groups (viz, branches of foreign banks and overseas subsidiaries of Indian banks) also came down.
- All bank groups witnessed lower interest income and interest expenses during 2020-21 due to decline in bank credit and reduction in global and domestic interest rates in wake of the pandemic (Table 3).
- Banks’ fee income from rendering various services also came down during 2020-21; over two-third of total fee income emanated from providing credit related services, foreign exchange trading services, payment and money transmission services and trade finance related services (Table 4).
- Branches of Indian banks in United Kingdom (UK) generated highest fee income, followed by their branches in Hong Kong, United Arab Emirates (UAE) and Singapore (Table 5).
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