14-08-2014, 10:45 AM
SEMINAR REPORT ON FOREIGN BANKS IN INDIA
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INTRODUCTION
India has a well developed banking system. Most of the banks in India were founded by Indian entrepreneurs and visionaries in the pre - independence era to provide financial assistance to traders, agriculturists and budding Indian industrialists. The origin of banking in India can be traced back to the last decades of the 18th century. The General Bank of India and the Bank of Hindustan, which started in 1786 were the first banks in India. Both the banks are now defunct. The oldest bank in existence in India at the moment is the State Bank of India. The State Bank of India came into existence in 1806. At that time it was known as the Bank of Calcutta. SBI is presently the largest commercial bank in the country.
The role of central banking in India is looked by the Reserve Bank of India, which in 1935 formally took over these responsibilities from the then Imperial Bank of India. Reserve Bank was nationalized in 1947 and was given broader powers. In 1969, 14 largest commercial banks were nationalized followed by six next largest in 1980. But with adoption of economic liberalization in 1991, private banking was again allowed.
The commercial banking structure in India consists of: Scheduled Commercial Banks and Unscheduled Banks. Scheduled commercial Banks constitute those banks, which have been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI includes only those banks in this schedule, which satisfy the criteria laid down vide section 42 (6) (a) of the Act.
Indian banks can be broadly classified into public sector banks (those banks in which the Government of India holds a stake), private banks (government does not have a stake in these banks; they may be publicly listed and traded on stock exchanges) and foreign banks.
Foreign banks have brought latest technology and latest banking practices in India. They have helped made Indian Banking system more competitive and efficient. Government has come up with a road map for expansion of foreign banks in India.
The road map has two phases. During the first phase between March 2005 and March 2009, foreign banks may establish a presence by way of setting up a wholly owned subsidiary (WOS) or conversion of existing branches into a WOS. The second phase will commence in April 2009 after a review of the experience gained after due consultation with all the stake holders in the banking sector. The review would examine issues concerning extension of national treatment to WOS, dilution of stake and permitting mergers/acquisitions of any private sector banks in India by a foreign bank.
Some of the foreign banks taken into the study are
1. Abu Dhabi Commercial Bank
2. Bank of America
ABU DHABI COMMERCIAL BANK
Abu Dhabi Commercial Bank (ADCB) is one of the most prominent nationalized banks of the United Arab Emirates (UAE). Three different banks viz. the Khalij Commercial Bank, the Emirates Commercial Bank and the Federal Commercial Bank merged in the month of July 1985, leading to the incorporation of the Abu Dhabi Commercial Bank. The ADCB operates in only two countries worldwide, which are the United Arab Emirates and India. The first branch of the Abu Dhabi Commercial Bank in India was opened in Churchgate of Mumbai, the financial capital of India. This branch reportedly caters to over 14,000 clients. Apart from this, the Bank has also opened a branch in Bangalore, the software hub of the nation.
Apart from regular banking services such as fund deposits, loans, ATM and Corporate Banking services, the Abu Dhabi Commercial Bank has introduced a range of specialized services in India. These services include NRI Banking, offering regular and premium NRI banking services such as remittances to the Non-Residents with tax deduction at the source itself.
The ADCB has introduced its StockSmart Depositary Services in India, enabling smooth and transparent stock transactions for its customers investing in shares through various Indian stock markets. The bank also offers cellphone banking and online banking service with the name ADCB Netlink.
BANK OF AMERICA
Bank of America is one of the largest financial service companies in the world. It is the second largest bank in terms of market capitalization. Furthermore, it is the fifth largest banking company in the United States by total revenue, as well as the second largest non - oil company in the U.S. (after Wal-Mart). In 2010, Bank of America was listed as the 3rd 'best' large company in the world by Forbes. Bank of America has become a major player in the investment banking industry and is one amongst the Big Four banks of US, after Citigroup, JP Morgan Chase and Wells Fargo. Apart from serving large corporations, Bank of America also serves individual consumers, small and middle market businesses, offering a full range of banking, investing, asset management and other financial products and services. Bank of America serves clients in 175 countries and has relationships with 99 percent of the U.S. Fortune 500 companies and 83 percent of the Global Fortune 500. The company is a member of the Federal Deposit Insurance Corporation (FDIC) and a component of both the S&P 500 Index and the Dow Jones Industrial Average.
Bank of America has approximately 57 million consumer and small business relationships at 5,900 banking centers and 18,000 ATMs. Majority of bank's services to corporate and institutional clients are provided through its U.S. and UK subsidiaries, Banc of America Securities LLC and Banc of America Securities Limited. The company's one of the main divisions, Global Corporate and Investment Banking group (GCIB) focuses on companies with annual revenues of more than $2.5 million, which are prominently middle-market and large corporations; institutional investors; financial institutions; and government entities. It also provides several innovative services in M&A, equity and debt capital raising, lending, trading, risk management, treasury management and research.
Witnessing the immense potential of Indian market, Bank of America started its commencement of operations in India through its Mumbai branch in 1964. Its headquarters is situated in Mumbai and has the branches in Delhi, Kolkata, Chennai and Bangalore. Apart from these major branches, operations of the bank are constantly expanding to cover the entire nation with active support coming from its Indian subsidiaries. Bank of America is strongly making its presence felt in cities like Hyderabad and Gurgaon. Bank's progress is attributed to the growth plans for Development Centers, ATM network, outsourcing units and BPO establishments along with new recruitment plans. Bank of America provides a number of financial products and solutions to top Indian corporate, multinationals, multilateral agencies & foreign government entities and financial institutions
BANK OF NOVA SCOTIA
The Bank of Nova Scotia, famously known as Scotia bank, is counted amongst North America's leading financial establishments and also the most international of all the Canadian banks. It stands at the third position in the list of Canada's largest banks in terms of deposits and market capitalization. The bank was established in the year 1832 in Halifax, Nova Scotia. In 1900, it shifted its executive offices to Toronto, Ontario. It is also a member of the Global ATM Alliance, a group of numerous major international banks. Scotiabank is also the very first Canadian bank to establish a branch in Newfoundland. The bank offers several personal, commercial, corporate and investment banking services to individuals, businesses, corporations and governments in over 50 countries worldwide, and also coast to coast all around Canada. Currently, the bank of Nova Scotia is running under Richard E. Waugh who is managing the responsibilities of both President and CEO. The Bank of Nova Scotia has announced itself as "Canada's International Bank" due to its accretion primarily in Latin America, the Caribbean, Europe and India.
In the present day multiple financial services market, Scotiabank has maintained to focus on creative and new technologies along with a personal touch. The Scotiabank Group offers this unique balance by prioritizing its customers. While the availability of various technological advances are responsible for quick, convenient and efficient routine banking transactions, the employees of the bank are entirely dedicated to creating stronger and deeper relationships with their customers in the most human and knowledgeable way.
Scotia bank has opened its head office at Mumbai and maintaining its strong identity in India along with Mumbai, it opened branches in other major cities, namely, New Delhi, Coimbatore, Bangalore and Hyderabad. Through their branch web and ScotiaMocatta, they offer a wide range of corporate and commercial services, accompanied with some retail banking products. The Scotia bank in India functions as a subsidiary of The Bank of Nova Scotia. The bank is wholly committed towards its Indian clients and holds appreciable track record and market expertise in financial markets of India.
BNP Paribas
BNP Paribas is one of the oldest banks in Europe, and the largest bank in the Eurozone (consortium of countries having adopted Euro as their primary currency), as reported by The Banker magazine. The bank is present in 87 countries with a 162,700-strong workforce offering its services to the bank.
On the 23rd of May 2000, two financial entities viz. the Banque Nationale de Paris (BNP) and Paribas merged together, leading to the formation of the BNP Paribas bank. BNP Paribas is known as one of the oldest banks of France, along with Crédit Lyonnais (LCL) and Société Générale. BNP Paribas had declared a potential loss of around €350 million due to the Madoff fraud, on the 14th of December 2008.
BNP Paribas has been one of the initial banks to have arrived at the Indian land, and had started its operations in the country as early as year 1860, at Calcutta (now Kolkata). The bank was then known as the Comptoir National d’Escompte de Paris (CNEP). At present, the head office is at Mumbai.
The bank is assumed as one of the top corporate banks operating in India, and has now spread its operations to 8 different locations in the country. These locations include Mumbai, New Delhi, Kolkata, Bangalore, Pune, Ahmedabad, Chennai and Hyderabad.
BNP Paribas carries out a wide range of baking operations in India, which might be categorized into three divisions viz. Corporate & Institutional Banking, Private Banking and Retail Banking.
Corporate and Institutional Banking services include Asset Management, Cash Management, Corporate Banking and Finance, Equity Brokerage and Trade Finance etc., helping the Indian corporate institutions leverage the expert and competent services offered by BNP Paribas.
Private Banking comprises of valuable and noteworthy wealth advisory services that the bank offers to its Indian customers, enabling them make the most out of their investments. Whereas under the Retail Banking services provided by BNP Paribas, the bank provides a range of investment and finance options, such as Mutual Funds, Retail Brokerage, Home Finance and Leasing services.
DEUTSCHE BANK
Deutsche Bank, headquartered at Frankfurt in Germany, ranks among the global leaders in corporate banking and securities, transaction banking, asset management, and private wealth management. It is one the world's leading international financial service providers with roughly EURO 2.2 trillion in assets and approximately 80,000 employees. Deutsche Bank is listed on the Frankfurt (FWB) and New York stock exchanges (NYSE).
The bank operates in Investment banking, Commercial banking, Retail banking, Private banking, and Asset management The bank's business model has two pillars, the Corporate & Investment Bank (CIB) and Private Clients & Asset Management. CIB of Deutsche Bank has established itself as one of the world's leading investment banking houses and is a major contributor in Deutsche Bank's profitability. It conducts sales and trading of debt and equity, derivatives and other innovative products.
Private Clients & Asset Management (PCAM) is comprised of Private Wealth Management, Private & Business Clients and Asset Management. Private Wealth Management is the bank's private banking arm, serving high net worth individuals. The bank has retail banking network which has grown significantly over the past few years.
Financial products and services are offered by the bank for corporate and institutional clients along with private and business clients. One can avail services including sales, mergers and acquisitions ((M&A), trading and origination of debt and equity, risk management products such as derivatives, transaction banking, corporate finance, wealth management, retail banking, and fund management.
Deutsche Bank is expanding its business in markets such as the Middle East, Latin America, Central & Eastern Europe and Asia Pacific.
Deutsche Bank was founded in 1870 in Berlin to facilitate trade relations between Germany, other European countries and overseas markets. Today it has presence in more than 70 countries
JP MORGAN CHASE BANK
An American multinational banking corporation, JP Morgan Chase Bank has been a major provider of financial services and is one of the largest banks in the world. It is the largest bank in United States by sales, profits, assets and market value. JP Morgan Chase Bank is also the largest public company in the world with assets of US$2 trillion and operating around sixty countries. It was formed in 2000, when Chase Manhattan Corporation merged with J. P. Morgan & Co. While the corporate headquarters of JP Morgan Chase Bank are in 270 Park Avenue, Midtown, Manhattan, New York City, New York, the retail and commercial bank is headquartered in Chase Tower, Chicago Loop, Chicago, Illinois, United States. Today, JP Morgan Chase Bank is one of the Big Four banks of US, others being Bank of America, Citigroup and Wells Fargo.
JP Morgan Chase Bank is the largest bank in United States in terms of investment banking and financial services. After the merger of JP Morgan &Co with Chase Manhattan Corp. and Chemical & Manufactures Hanover in 2000, JP Morgan Chase Bank became the largest and oldest money centers in the United States. In a major step,
MIZUHO CORPORATE BANK LTD
Mizuho Corporate Bank Ltd is one of the most trusted corporate and investment banking subsidiary of Mizuho Financial Group, which is the second largest Japanese financial service group. The bank was established in April 2002 as a result of the merger of the Dai-Ichi Kangyo Bank and Fuji Bank's corporate and investment banking division with the Industrial Bank of Japan. The bank's headquarters lies in the Otemachi district of Chiyoda, Tokyo, Japan. With the strong support of the Mizuho Financial Group in association of its credit and financial strength, the bank has been positioned as a chief competitor in the financial markets and is also placed among the leading corporate and investment banks of Japan. In 2006 the bank launched its branch in Wuxi, China in a bid to solidify transactions with Japanese companies functioning in the city. With the same, it became the first foreign bank to open a branch in Wuxi. The international network of the bank consists of 16 offices in Japan and around 82 overseas offices.
The one factor which differentiates this bank from others is that apart from the services offered by the Mizuho Corporate Bank, it also provides a 100% tailor-made services through the bank's network of group companies including Mizuho Bank, Mizuho Securities, and Mizuho Trust & Banking. This brings the advanced
STANDARD CHARTERED BANK
Standard Chartered Bank is a London based bank, currently operational within over 70 nations with more than 1,700 branches and 73,000 strong workforce as of April 2009. Although the bank is located in Britain, still a huge chunk of its revenues originate from the continents of Asia, Africa and Middle East.
Standard Chartered Bank was formed as the merger of two banks viz. The Chartered Bank of India, Australia & China and The Standard Bank of British South Africa. The merger took place in the year 1969.
Standard Chartered Bank has been actively engaged in acquisitions and expansion, and acquired Grindlays Bank from ANZ Bank in the year 2000 which considerably increased its banking operations in the nations of India and Pakistan. The bank defeated HSBC Bank in a bid to acquire Korea First Bank in the year 2005, which was renamed as SC First Bank after the acquisition.
In the year 2006 the bank announced to have acquired an 80% stake in the Union Bank of Pakistan for a sum of US$ 511 Million, making the Standard Chartered Bank (Pakistan) the 6th largest bank in the nation of Pakistan.
In India, the Standard Chartered Bank introduced its first branch in Kolkata on 12th of April 1858. Later on, when Mumbai took over Kolkata as the financial capital of India, the bank administration was shifted to Mumbai from Kolkata.
Currently, the bank offers a wide variety of banking services and products to the Indian customers under Personal Banking, Private Banking, SME Banking and Wholesale Banking categories.
The services being offered include Regular Banking Services, Credit Cards, Debit & Prepaid cards, Loans & Mortgages, NRI Banking Services, Executive Banking and Insurance & Investment products.
As of April 2009, Standard Chartered bank is located in all the prominent cities of India, including New Delhi, Mumbai, Kolkata, Bangalore, Hyderabad, Ahmedabad etc.
THE ROYAL BANK OF SCOTLAND
The Royal Bank of Scotland was founded in 1727 and has a history of over three hundred years. With its rich history, it has become one of the largest financial service groups in the world. It provides banking services for individuals, corporate houses and institutions. The headquarters of Royal Bank of Scotland is in Edinburgh, Scotland. The bank is a part of retail banking subsidiaries of the Royal Bank of Scotland Group and along with NatWest and Ulster Bank, provides branch banking facilities in the United Kingdom. The Royal Bank of Scotland and the Royal Bank of Scotland Group are completely separate from the Bank of Scotland, which was established in 1695 and is also based in Edinburgh, Scotland.
The Royal Bank of Scotland has around 700 branches, mainly in Scotland. The bank has a number of branches spread in many large towns and cities throughout England and Wales. The Royal Bank of Scotland Group provides a strong support to large enterprises, including multi-national corporations (MNC) and financial institutions. It offers integrated consumer and business banking services including transaction banking, risk management, investment banking, private banking and asset management. In the year 2007, the Royal Bank of Scotland Group strengthened its global presence through purchasing several parts of the Dutch bank, ABN AMRO, including their businesses in India.
The history of Royal Bank of Scotland in India goes back to 1921. Since then, the bank has expanded significantly across the country, with more than 3,000 staff in Kolkata, Mumbai, New Delhi, Chennai, Pune, Baroda, Hyderabad, Bengaluru, Noida, Gurgaon and Surat branches. There are total of 28 branches throughout the country with 1.3 million customers.
The Royal Bank of Scotland has several extensive operations in Mumbai, Delhi and Chennai and plans to be a major competitor in the Indian market. Using its global reach and expertise of research team, sales and trading, equity capital market and mergers & acquisitions (M&A) advisory professionals, the bank has made some of the biggest and most innovative landmark transactions in India for the corporate and institutional clients. The bank is also providing a wide range of services such as transaction banking, fixed income and foreign exchange products and services, including sales and trading, fixed income origination, derivatives, structured lending and commodity financing.