Indian Banks Expand Overseas Presence to 417 in FY23: RBI Survey

Indian banks significantly increased their overseas presence, reaching 417 subsidiaries in the fiscal year 2022-23, up from 399 in the previous year, according to a recent Reserve Bank of India (RBI) survey. The survey encompasses 14 Indian banks with foreign branches or subsidiaries and 44 foreign banks with a presence in India.

Overseas presence

• Indian banks expanded their overseas presence through subsidiaries, reaching 417 in FY23 compared to 399 in the previous fiscal year, as per RBI data.
• The growth is highlighted by a 0.5% and 6.2% increase in employee strength for foreign branches and subsidiaries, respectively.

Foreign Banks in India

• The number of branches and employees of foreign banks in India contracted to 774 from 858 in FY22.
• A shift of retail business from a major foreign bank to a domestic private sector bank resulted in a decline in aggregate deposits and credit for foreign banks.

Financial Impact

• Despite the decline in deposits and credit, capital and investments of foreign banks in India increased during FY23.
• The consolidated balance sheet of foreign banks in India saw a 5.7% increase in US dollar terms.

Financial Performance and Global Monetary Policy

• The tightening global monetary policy cycle in FY23 led to a substantial rise in interest income and expenses across bank groups.
• The total income to assets ratio of overseas branches of Indian banks increased to 3.9% in FY23 compared to 1.6% in FY22.

Geographical Impact

• Branches of Indian banks in the UAE generated the highest fee income, followed by those in the UK, Hong Kong, and Singapore, according to the RBI.

Important Questions Related to Exams

Q: How many subsidiaries did Indian banks have overseas in FY23?

A: Indian banks increased their overseas subsidiaries to 417 in FY23, up from 399 in the previous fiscal year.

Q: What was the impact on foreign banks in India during FY23?

A: The number of branches and employees of foreign banks in India contracted to 774 from 858. Shift in retail business led to a decline in aggregate deposits and credit but increased capital and investments.

Q: What were the key financial trends for foreign banks in India?

A: The consolidated balance sheet of foreign banks in India increased by 5.7% in US dollar terms. The global monetary policy cycle led to a rise in interest income and expenses.

Q: How did Indian banks perform in terms of income and assets ratio?

A: The total income to assets ratio for overseas branches of Indian banks increased to 3.9% in FY23, compared to 1.6% in FY22. However, it remained lower than the 6.9% for foreign banks in India.

Q: Which region generated the highest fee income for Indian banks?

A: Branches of Indian banks in the UAE generated the highest fee income, followed by those in the UK, Hong Kong, and Singapore.