Powered by
Sponsored by

Why foreign banks are leaving India

Many foreign banks have stopped or downsized businesses in India

banking rep Representational image

Foreign banks have been seeing a decline in market share in India. Their share of 6.55 per cent of advances in 2005 steadily declined to 4.15 per cent in 2020. Barclays, Deutsche Bank, HSBC, Morgan Stanley, Bank of America-Merrill Lynch, RBS, UBS and Standard Chartered have either stopped or cut down their businesses and operations in India. This has been attributed to various factors:

·        Many of these banks had remodelled their business after the global financial crisis in 2008, focusing on key markets; India is not a key market for most of them

·        High capital requirements in India

·        High regulatory costs in India: Policies like priority sector lending norms and Jan Dhan accounts hurt the bottom line

·        Inability to scale up operations because of the strict regulatory regime

·        Under-evolved market

·        Intense competition


📣 The Week is now on Telegram. Click here to join our channel (@TheWeekmagazine) and stay updated with the latest headlines