I had a discussion about banking with my dad, DGM at State Bank of Hyderabad. During the discussion I asked him ' What is the major difference between Indian Banks and Foreign Banks operating in India?'. He replied that he could find two major differences -
- The method of raising funds to mobilize. While Indian banks depend heavily on Deposits(80%) the foreign banks depend a little less on Deposits (50%). This helps them in getting the business done with lesser branches.
- Foreign Banks had 33% of income from other income sources while Indian banks had less than 20% from other income. The below table shows the segmentation. This depicts that foreign banks earn a lot more income from advisory services.
