Indian Banks Extend Global Reach With 417 Subsidiaries In 2022-23

In the fiscal year 2022-23, Indian banks expanded their global footprint through subsidiaries, reaching a total of 417 compared to 399 in the previous fiscal year, according to data released by the Reserve Bank of India (RBI).

The RBI's survey on International Trade in Banking Services 2022-23 revealed a 0.5 per cent increase in employee strength for foreign branches and a 6.2 per cent increase for subsidiaries of Indian banks during the same period. The survey comprises 14 Indian banks with overseas branches or subsidiaries and 44 foreign banks with branches or subsidiaries in India.

Contrastingly, the number of branches and employees of foreign banks in India contracted from 858 to 774 during 2022-23. The RBI attributed this decline to the transfer of retail business from a major foreign bank to a domestic private sector bank, resulting in a decrease in aggregate deposits and credit for foreign banks. However, their capital and investments witnessed an uptick in the fiscal year.

Global Monetary Policy Impact

The consolidated balance sheet of foreign banks in India recorded a 5.7 per cent increase in US dollar terms. The RBI noted that the global monetary policy tightening cycle during the year led to a significant rise in interest income and expenses across various bank groups.

The survey also highlighted the expansion of overseas business for Indian banks, citing increased mobilization of deposits and lending activities. The total income to assets ratio of overseas branches of Indian banks rose to 3.9 per cent in 2022-23, a significant increase from 1.6 per cent in the previous fiscal year. However, it remained lower compared to the 6.9 per cent ratio observed for foreign banks in India.

Highest Fee Income Generated

According to the RBI, branches of Indian banks in the UAE generated the highest fee income, followed by those in the UK, Hong Kong, and Singapore. The data underscores the dynamic nature of the global banking landscape and the evolving strategies of Indian and foreign banks in response to changing market conditions.