Foreign banks are those bank which belong to foreign
countries and have their incorporated head office in foreign countries and
branch offices in India and the
share capital of the foreign banks will
be fully contributed by foreign investors it’s called foreign banks
What is the role of foreign
banks or international banks in india or
Indian economy??
1. Generation of employment
opportunities
Foreign bank also helpful in increasing employment in
business process outsourcing (BPO) sector. As India is an emerging (उभरता हुआ )information
technology service provider with low cost technology and Availability of
English speaking employee, which give acceleration to BPO sector and in result
increasing employment generation.
2. Foreign capital flow
As the foreign bank operate in different countries and
dealing with the multinational corporation thus helpful in bringing foreign
capital flow in India as investment destination .to start a foreign bank, there
is a requirement of INR 3 billion with minimum CRAR of 10% which ultimately
contribute in banking system or economy
(Capital to risk weight asset ratio)
3. Lending to priority sector
Foreign banks have played an important role in the Indian
economy, especially (खास तौर पर) in the priority sector. Foreign bank are not excluded from
the lending to priority sector policy of RBI.
The PSL norms Mandate foreign bank to eventually lend 40% of
their total loan book to the priority sector, such as a agriculture sector,
rural infrastructure and medium, small and micro enterprises .MSMEs
4. Competition in banking sectors
Prior (पूर्व) to enter a foreign bank, all commercial banks were on
the same level, same structure and same services. Foreign bank brought competition due to its special advantage and competencies (क्षमता). due to competition
various qualitative service are being provide by the banks to their customer at
less cost and with the short span of time
5. Technology advantage
Prior 1990s foreign bank easily distinguished from public
sector bank due to technological advantage. They used technology to their
advantage to create and often maintain lead in a premium services such as
private banking 24 hours mobile banking and internet banking. The first ATM was
set up by HSBC in 1987 foreign bank build profitable business with a relatively
high share of investment and fees income.
6. Managerial Advantage
In additional to other benefit foreign bank have made
considerable (महत्वपूर्ण) contribution to banking sector over the year by bringing global
best practice as well as grooming talent. Foreign bank have been innovative in
identifying special need of market. The example of such innovation are cash
credit management, cheque collection, travellers cheque and clearing process
system
7. Help to multinational corporation
Foreign banks present in India as a representative offices is
often have corresponding banking relation with the domestic bank and provide a
useful platform for foreign banks of access opportunity for foreign currency
lending to Indian corporation and financial institution. Their relation with
Indian corporate client is Vital due to ability of foreign bank to provide
access to global capital and debt market.
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