Indian Banks Extend Global Reach: Surge in Overseas Presence and Financial Activity in 2022-23

In the fiscal year 2022-23, Indian banks expanded their global presence through subsidiaries, increasing from 399 to 417, according to data from the Reserve Bank of India (RBI). The survey also revealed a 0.5% and 6.2% growth in employee strength for foreign branches and subsidiaries, respectively. Conversely, the number of branches and employees of foreign banks in India decreased from 858 to 774 during the same period.

The RBI attributed the growth of Indian banks’ overseas business to increased deposit mobilization and lending activities. A significant factor was the transfer of retail business from a major foreign bank in India to a domestic private sector bank, impacting the aggregate deposits and credit of foreign banks. However, their capital and investments saw an uptick in 2022-23.

The global monetary policy tightening led to a substantial rise in interest income and expenses across bank groups, as reported by the RBI. The total income to assets ratio of overseas branches of Indian banks increased to 3.9%, though it remained lower compared to the 6.9% ratio for foreign banks in India. The RBI highlighted that Indian bank branches in the UAE generated the highest fee income, followed by those in the UK, Hong Kong, and Singapore.

In summary, the RBI’s survey indicates a notable expansion of Indian banks’ overseas presence through subsidiaries, with positive trends in deposit mobilization and lending activities. The tightening global monetary policy had varying impacts on interest income and expenses, and the shift of retail business contributed to changes in the aggregate financial landscape.