Survey on International Trade in Banking Services, 2021-22
Today, the Reserve Bank released the results of 2021-22 round of the survey on International Trade in Banking Services (ITBS). This annual survey 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 for foreign branches and overseas subsidiaries (including joint ventures) of Indian banks as well as foreign banks operating in India (details of the services are given in the Annex).
The latest round of the survey covers fourteen Indian banks having overseas branches/subsidiaries and 45 foreign banks having branches/subsidiaries in India. Due to merger/closure of some branches during the year, Indian banks have reported 117 overseas branches (121 branches reported in the previous survey round), whereas select Indian banks increased their overseas presence through subsidiaries (Table 1).
Highlights
- Consolidated balance sheets of overseas branches and subsidiaries of Indian banks recorded marginal increase during 2021-22 in Rupee terms but contracted by (-)1.4 per cent and (-)1.8 per cent, respectively, when valued in US dollar terms due to cross-currency movements. On the other hand, the foreign banks in India have expanded their consolidated balance sheet by 10.3 per cent in Rupee terms and by 7.0 per cent in US dollar terms (Table 2).
- Lending by all three categories of banks increased during 2021-22.
- Deposits, which constituted less than a third of total liabilities of overseas branches of Indian banks, increased by 9.2 per cent in US dollar terms during the year. Foreign banks in India have also been recording steady growth in deposits and their reliance on deposit mobilisation is higher (over 60 per cent of total liabilities).
- In synchrony with easy monetary conditions during 2021-22, interest income and expenses of overseas branches of Indian banks recorded a decline; their total income and expenses also came down. Total income of foreign banks in India also declined due to 25 per cent decline in non-interest income (Table 3).
- Return on assets for foreign banks in India declined to 5.8 per cent in 2021-22 (6.6 per cent in the previous year) but remained higher than that for overseas branches of Indian banks (1.6 per cent in 2021-22) (Table 3).
- During 2021-22, fee income of foreign banks in India rose by 19 per cent, whereas it declined by nearly 10 per cent for overseas branches of Indian banks. Over two-third of total fee income emanated from credit related services, foreign exchange trading services, payment and money transmission services and trade finance related services (Table 4).
- Branches of Indian banks in the United Kingdom (UK) generated highest fee income, followed by those in United Arab Emirates (UAE), Singapore and Hong Kong (Table 5).
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