Foreign Banks

FOREIGN BANKS IN INDIA PRESENTED BY: Friday 20 February 2009

ANJALI SINGH & NITESH KUMAR 1

Introduction • REFORMS • ECONOMIC ACTIVITY AND GROWTH RATE • GOVERNMENT NORMS • POTENTIAL FOR ATTRACTIVE RETURNS • CUSTOMER SERVICE • COMPETITIVE • ACCURATIVE • LATEST TECHNOLOGY AND PRACTICES

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List Of Foreign Banks ABN Amro Bank N.V. Abu Dhabi Commercial Bank Limited American Express Bank Limited Antwerp Diamond Bank N.V. AB Bank Limited Bank International Indonesia Bank of America NA Bank of Bahrain and Kuwait B.S.C. Bank of Ceylon Barclays Bank PLC BNP Paribas Chinatrust Commercial Bank Citibank N.A. Calyon Bank Deutsche Bank AG

Friday 20 February 2009

JP Morgan Chase Bank Krung Thai Bank Public Company Ltd. Mashreq bank psc MIZUHO Corporate Bank Ltd. Oman International Bank S.A.O.G. Shinhan Bank Societe Generale Sonali Bank Standard Chartered Bank State Bank of Mauritius Ltd. The Bank of Nova Scotia The Bank of Tokyo-Mitsubishi UFJ, Ltd. The Development Bank of Singapore Ltd. The Hongkong and Shanghai Banking Corporation. Ltd.

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Major Foreign Banks In India • STANDARD CHARTERED • CITIBANK • HSBC BANK • ABN-AMRO BANK

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WTO Agreement Phase I: March 2005 to March 2009 New banks – First time presence Minimum start up capital of Rs 3 billion and capital adequacy ratio of 10%

Existing banks – Branch expansion policy limitation of setting up a maximum of 12 branches per year is to be relaxed and a more liberal policy for under banked areas will be adopted

Conversion of existing branches to wholly owned subsidiaries Acquisition of shareholding in select Indian private sector banks(74% cap) Phase II: April 2009 onwards According ‘full national treatment’ to wholly owned subsidiaries of foreign banks Dilution of stake in wholly owned subsidiaries Merger and acquisition of any private sector bank in India

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Foreign Banks: Strong Areas • FOREIGN EXCHANGE • TREASURY • CORPORATE LENDING • PROJECT FINANCING • INVESTMENT BANKING • ASSET MANAGEMENT • CORPORATE FINANCE • MERGER AND ACQUISITIONS • OFF-SHORING • TRADE FINANCE

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RBI Regulations • Compliance with BASEL norms • Approval of home country regulator • Good political relations with parent country. • Financial soundness • Start up capital of 3 billion and 10%capital adequacy ratio. • Corporate Governance: • minimum 50% directors are Indian nationals • minimum 50% non executive directors • one third are independent directors

• Compliance to companies act 1956 and RBI act 1934, and Banking regulation act 1949

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Challenges Faced • PRODUCT CHANGES • INCREASING COMPETITION • PARENT BANK STRATEGY

CHANGES • REGULATORY CHANGES • STATE OF ECONOMY • DEVELOPMENT OF OUTSOURCING MARKET • INCREASING COMPETITION

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Competition • Many new banks expected to open in 2009 • StanChart, Citibank, and HSBC have the lions share among the foreign banks • Foreign banks bring with them a variety of expertise, which needs to be countered by other Indian Banks. • 2009 will be crucial in terms of competitions.

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THANK YOU! Friday 20 February 2009

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