Banking

Nearly 47% of our banking industry survey respondents say that off shoring will be a top profit driver. A Deloitte Research report, Global Financial Services Offshoring: Scaling the Heights, estimates that offshoring generates savings of $5 billion a year for financial firms, more than 40% on the cost of running the same operations onshore. Expanding the commitment further would substantially increase savings, the report found.

Banks increasingly are moving away from outsourcing toward captive operations or a mix of captive and outsourced functions. HSBC, for instance, has expanded offshoring beyond basic pro- cessing into research and IT development and has only captive operations, building up operational sectors in India, Malaysia, the Philippines, Sri Lanka and China.

Nearly two-thirds of banking survey respondents say that China will be important or very important to their organization in 2010, compared with 44% for India, nearly a third for Russia and just 22% for Brazil. The focus on China isn’t surprising given that China not only has the world’s largest population, but also one of its largest savings rates – 40% of GDP .

The lure of China’s high growth and huge population has attracted $18 billion in foreign direct investment in China’s banks in a single year. Three out of the four national banks have foreign partners, who have gained access to a branch net- work and client list they could never afford to replicate – even after WTO rules force China to open its domestic banking mar- ket fully from end-2006. Every deal is accompanied by a joint venture in savings and insurance products and credit cards.

According to the Reserve Bank of India (RBI)’s ‘Quarterly Statistics on Deposits and Credit of Scheduled Commercial Banks’, March 2013, Nationalised Banks accounted for 52.4 per cent of the aggregate deposits, while the State Bank of India (SBI) and its Associates accounted for 22 per cent. The share of New Private Sector Banks, Old Private Sector Banks, Foreign Banks, and Regional Rural Banks in aggregate deposits was 13.6 per cent, 5.1 per cent, 4 per cent and 2.9 per cent, respectively.

Nationalised Banks accounted for the highest share of 51 per cent in gross bank credit followed by State Bank of India and its Associates (22.7 per cent) and New Private Sector Banks (14 per cent). Foreign Banks, Old Private Sector Banks and Regional Rural Banks had shares of around 4.9 per cent, 5 per cent and 2.5 per cent, respectively.

Banks’ credit (loan) growth increased to 18 per cent for the fortnight ended September 6, 2013, while deposits grew by 13.37 per cent showed the data by RBI.

 

India's foreign exchange reserves increased to US$ 277.73 billion as of October 4, 2013.