utkarsh project report
TRANSCRIPT
PROJECT REPORT
ON
Enhancing NRI business for IDBI Bank
A report submitted in partial fulfillment of course curriculum of Post-
Graduate Diploma in Management (2009 – 11)
Submitted by
UTKARSH TANDON
1
DECLARATION
I hereby declare that the project work titled ‘Enhancing NRI Business for IDBI
Bank’ submitted by me as part of my Two-Years Post-Graduate Diploma in
Management course curriculum is an original work done by me under the
able guidance of Mr. Neel Lohit, General Manager, (Head-NRI Business &
Financial Inclusion), IDBI Bank and the same has not been submitted in the
past as a project work anywhere.
(Utkarsh Tandon)
Countersigned by Project Guide-
Mr. Neel Lohit
General Manager
Head-NRI Business & Financial Inclusion
2
ACKNOWLEDGEMENT
One of the pleasant aspects of preparing a report is the opportunity to thank
those who have contributed to make the project completion possible.
I would like to thank IDBI Bank for giving me an opportunity to carry out my
project that is a part of my summer internship.
I am extremely thankful to my mentor, Mr. Neel Lohit, General Manager
(Head-NRI Business & Financial Inclusion) whose active cooperation &
guidance during the course of completion of project work helped me to
formulate, redefine and implement a practical approach and finish the
project successfully.
I am thankful to the staff members of NRI Services department of IDBI Bank
who were always cooperative and provided me with the required information
that helped me to complete the project in time.
I am also thankful to all those seen and unseen hands & heads, which have
been of direct or indirect help in the completion of this project.
3
EXECUTIVE SUMMARY
IDBI Bank is one of India's leading public sector banks and 4th largest Bank
in overall ratings. RBI categorized IDBI as an "other public sector bank". It
was established in 1964 by an Act of Parliament to provide credit and other
facilities for the development of the fledgling Indian industry. It is currently
the tenth largest development bank in the world in terms of reach with 1162
ATMs, 710 branches and 474 centers. In 1976, the bank’s ownership was
transferred to the Government of India. Although Government shareholding
in the Bank came down below 100% following IDBI’s public issue in July 1995,
the former continues to be the major shareholder i.e. 52.3%. During the four
decades of its existence, IDBI has been instrumental not only in establishing
a well-developed, diversified and efficient industrial and institutional
structure but also adding a qualitative dimension to the process of industrial
development in the country. IDBI has played a pioneering role in fulfilling its
mission of promoting industrial growth through financing of medium and
long-term projects, in consonance with national plans and priorities.
Over the years, IDBI has enlarged its basket of products and services,
covering almost the entire spectrum of industrial activities, including
manufacturing and services. IDBI provides financial assistance, both in rupee
and foreign currencies, for green-field projects as also for expansion,
modernization and diversification purposes. It was accorded the status of
principal financial institution for coordinating the working of institutions at
national and state levels engaged in financing, promoting, and developing
industries.
IDBI has provided assistance to development related projects and
contributed to building up substantial capacities in all major industries in
4
India. IDBI has directly or indirectly assisted all companies that are presently
reckoned as major corporate in the country. It has played a dominant role in
balanced industrial development.
IDBI has engineered the development of capital market through helping in
setting up of the Securities Exchange Board Of India (SEBI), National Stock
Exchange Of India Limited (NSE), Credit Analysis And Research Limited
(CARE), Stock Holding Corporation Of India Limited (SHCIL), Investor Services
Of India Limited (ISIL), National Securities Depository Limited (NSDL), and
Clearing Corporation Of India Limited (CCIL).
In April 1990, IDBI set up the Small Industries Development Bank Of India
(SIDBI) as wholly owned subsidiary to cater to specific needs of the small-
scale sector.
In 1992, IDBI accessed the domestic retail debt market for the first time by
issuing innovative bonds known as the deep discount bonds. These new
bonds became highly popular with the Indian investor.
In 1994, IDBI Act was amended to permit public ownership up to 49 per cent.
In July 1995, it raised over Rs 20 billion in its first Initial Public Offer (IPO) of
equity, thereby reducing the government stake to 72.14 per cent. In June
2000, a part of government shareholding was converted to preference
capital. This capital was redeemed in March 2001, which led to a reduction in
government stake. The government stake currently is 51 per cent.
In August 2000, IDBI became the first all India financial institution to obtain
ISO 9002: 1994 certification for its treasury operations. It also became the
first organization in the Indian financial sector to obtain ISO 9001:2000
certifications for its FOREX services.
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In 2006, IDBI Bank acquired United Western Bank in a rescue. Annasaheb
Chirmule, who worked for the cause of Swadeshi movement, founded Satara
Swadeshi Commercial Bank in 1907, and some three decades later founded
United Western Bank. The bank was incorporated in 1936, and commenced
operations the next year, with its head office in Satara, Maharashtra. It
became a Scheduled Bank in 1951. In 1956 it merged with Union Bank of
Kolhapur, and in 1961 with Satara Swadeshi Commercial Bank. At the time of
the merger with IDBI, United Western had some 230 branches spread over
47 districts in 9 states, controlled by five Zonal Offices at Mumbai, Pune,
Kolhapur, Jalgaon and Nagpur.
VISION STATEMENT"To be trusted partner in progress by leveraging quality human capital and
setting global standards of excellence to build the most valued financial
conglomerate"
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TABLE OF CONTENT1. INTRODUCTION……………………………………………………………………………
……………………….8
NON-RESIDENT INDIAN (NRI)
……………………………………………………………………..8
OVERSEAS CORPORATE BODIES (OCBS)
…………………………………………………….9
NRI BUSINESS IN
INDIA………………………………………………………………………………
.9
DETAILS OF PRIVATE TRANSFERS TO
INDIA……………………………………………..10
FACILITIES AVAILABLE TO
NRI’s/OCB’s……………………………………………………10
TYPES OF BANK ACCOUNTS FOR
NRI's……………………………………………………..11
PROCEDURE FOR OPENING A NON-RESIDENT (NRI) ACCOUNTS IN
INDIA…13
MAJOR BANKS OFFERING DIFFERENT TYPES OF ACCOUNTS TO
NRI’S…….14
ECONOMIC IMPACT OF
REMITTANCES………………………………………………………14
INTEREST
RATES……………………………………………………………………………
…………15
FOREIGN EXCHANGE DEPARTMENT OF
RBI……………………………………………..17
BORROWINGS FROM NRIs/PIOs BY INDIAN
NATIONALS……………………………19
7
PORTFOLIO INVESTMENT SCHEME (PIS)
……………………………………………………20
2. RESEARCH
OBJECTIVES…………………………………………………………………………………
…….21
3. RESEARCH
METHODOLOGY……………………………………………………………………………
……22
4. ANALYSIS……………………………………………………………………………………
……………………….23
STATE BANK OF
INDIA………………………………………………………………………………
23
HDFC
BANK………………………………………………………………………………
………………26
ICICI
BANK………………………………………………………………………………
……………….29
CORPORATION
BANK………………………………………………………………………………
.32
AXIS
BANK………………………………………………………………………………
……………….34
IDBI
BANK………………………………………………………………………………
…………………37
5. FINDINGS……………………………………………………………………………………
……………………….41
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6. LIMITATIONS…………………………………………………………………………………
…………………….43
7. RECOMMENDATIONS………………………………………………………………………
…………………..44
8. REFERENCES………………………………………………………………………………
……………………….46
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1. INTRODUCTION
Non-Resident Indians (NRIs) are basically the persons who are having some
kind of origin from India and presently staying outside the country. They can
be seen across the globe in a large scale and most of them are businessman
or working for many private as well as public sector organizations. It is
understood that there are over 2.5 crores of NRIs/PIOs spread across the
world in over 136 countries. NRIs are mostly present in large numbers in big
countries like Australia, USA, UK, Germany, Switzerland, France etc. where
there is a great scope for personal growth and career. NRIs generally keep
some kind of connections with their parent country and this connection is
basically atleast in the form of banking relationship where they remit their
foreign earnings through these financial institutions. The NRI Services desks
in the bank branches basically provide banking services to NRIs/ or there are
many NRI specific branches that cater to the needs of NRIs.
NRI Banking in India is maintained by banks that hold official Authorized
Dealers’ license from the Reserve Bank of India. The financial budget for
2007-08 extends NRI accounts to Regional Rural Banks (RRBs) as well.
Non-Resident Indian (NRI):-
The word NRI is used in various senses in different fields. In general, A Non-
Resident Indian (NRI) is an Indian citizen who has migrated to another
country, a person of Indian origin who is born outside India, or a person of
Indian origin who resides permanently outside India. Other terms with the
same meaning are overseas Indian and expatriate Indian.
A Person of Indian Origin (PIO) is usually a person of Indian origin who is not
a citizen of India. Such people are issued PIO Cards, which exempt them
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from many restrictions such as visa and work permit requirements, along
with certain other economic limitations.
For the purposes of availing of the facilities of opening and maintenance of
bank accounts and investments in shares/securities in India, Person of Indian
Origin means a citizen of any country other than Pakistan or Bangladesh, if
1. he at any time, held an Indian passport; or
2. he or either of his parents or any of his grandparents was a citizen of
India by virtue of the constitution of India or Citizenship Act, 1955; or
3. the person is a spouse of an Indian citizen or a person referred to in
clause (1) or (2) above
Overseas Corporate Bodies (OCBs):-
Overseas Corporate Bodies (OCBs) are bodies predominantly owned by
individuals of Indian nationality or origin resident outside India and include
overseas companies, partnership firms, societies and other corporate bodies
which are owned, directly or indirectly, to the extent of at least 60% by
individuals of Indian nationality or origin resident outside India as also
overseas trusts in which at least 60% of the beneficial interest is irrevocably
held by such persons. Such ownership interest should be actually held by
them and not in the capacity as nominees.
NRI Business in India:-
The confidence of non-resident Indians in the Indian economy is reviving
again. After an outflow of $2 billion in 2008-09, NRI deposits have increased
by nearly $3.7 billion in the first four months of 2009-10, despite the volatile
movements in the interest rates.
According to the RBI, total NRI deposits had declined to $41.55 billion by end
of March 2009 from $43.60 billion in April 2008. However, NRI fund inflows
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increased since April 2009 and touched $45.33 billion till July 2009, as per
the RBI's September bulletin. Most of the NRIs deposits come through the
Foreign Currency Non-resident (FCNR) account and Non-resident External
Rupee Accounts. As of July 2009, FCNR deposits accounts for $14.16 billion
($13.21 billion in March 2009) and $25.22 billion ($23.57 billion in March) in
the NR(E)RA. Deposits under the NRO (Non-resident Ordinary) account were
also higher at $5.9 billion ($4.7 billion). As interest rates on both FCNR and
NR(E)RA are linked to the Libor (London Inter Bank Rate), Indian banks find
NRI deposits quite cheap when compared to local deposits. Most of the NRI
deposits which are flowing to South-based banks come from the Middle East.
Details of Private Transfers to India:-
(in USD Billion)
YearTotal Private
Transfer
Inward
Remittance
for Family
Maintenance
Local
Withdrawals/
Redemption of
NRI Deposits
2006-07 30.8 14.7 13.2
2007-08 43.5 21.9 18.9
2008-09 46.4 23.1 20.6
In USD
(B)2001 2003 2005 2007 2008
Net
Private
Transfer
12.8 16.3 20.5 27.9 40.7
Net NRI
Deposits2.3 2.9 -0.9 4.3 0.1
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Source:- RBI Monthly Bulletin May 2010, ARTICLE- Developments in India’s Balance of Payments during the Third Quarter (October-December 2009) of 2009-10 and April-December 2009
FACILITIES AVAILABLE TO NRI’S/OCB’S:-
Maintenance of bank accounts in India.
Investment in securities/shares of, and deposits with Indian firms/
companies.
Investments in immovable properties in India.
TYPES OF BANK ACCOUNTS FOR NRI'S :-
Non-Resident (External) Rupee Accounts (NRE Accounts):-
NRIs, PIOs, OCBs are eligible to open NRE Accounts. These are rupee
denominated accounts. Accounts can be in the form of savings, current,
recurring or fixed deposit accounts. Accounts can be opened by remittance
of funds in free foreign exchange. Foreign exchange brought in legally,
repatriable incomes of the account holder, etc. can be credited to the
account. Joint operation with other NRIs/PIOs is permitted. Power of attorney
can be granted to residents for operation of accounts. The balance in the
account is freely repatriable. Interest lying to the credit of NRE accounts is
exempt from tax in the hands of the NRI.
Ordinary Non-Resident Rupee Accounts (NRO Accounts):-
These are Rupee denominated non- repatriable accounts and can be in the
form of savings, current, recurring or fixed deposits. These accounts can be
opened jointly with residents in India. When an Indian National/PIO resident
in India leaves for taking up employment, etc. outside the country, his bank
account in India gets designated as NRO account. Interest income, from NRO
accounts is taxable. Interest income, net of taxes is repatriable.
Foreign Currency Accounts:-
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Foreign Currency (Non –Resident) Accounts (Banks) (FCNR (B) Accounts)
NRIs/PIOs are permitted to open such accounts in US Dollars, Sterling
Pounds, Japanese Yen, Australian Dollars, Canadian Dollars and Euro. The
account may be opened only in the form of term deposit for any of the five
maturity periods viz; (i) one year and above but less than two years (ii) two
years and above but less than three years and (iii) three years and above but
less than four years (iv) four years and above but less than five years (v) five
years only. Interest income is tax free in the hands of NRI until he maintains
a non-resident status or a resident but not ordinarily resident status under
the Indian tax laws. FCNR (B) accounts can also be utilized for local
disbursements including payment for exports from India, repatriation of
funds abroad and for making investments in India, as per foreign investment
guidelines.
Resident Foreign currency (RFC):-
Citizen of India or persons of Indian origin who have been outside India for a
continuous period of not less than one year and have become resident in
India on or after 18/4/92 are eligible to maintain RFC accounts. This can be
held singly or jointly in the names of eligible persons. Accounts can be
maintained in the form of savings bank, current accounts, and term deposits.
Cheque book & loans / overdrafts facility is not permitted on RFC accounts. It
is maintained in designated currency viz. USD, GBP, EURO, JPY. The interest
on this is payable in the designated currency. Nomination facility is also
available. Nominees can be residents or non-residents.
The entire amount of foreign exchange brought to India at the time of return
to India for permanent settlement as well as balances standing to the credit
of NRE and FCNR accounts at the time of return, income received on
overseas assets in the form of interest, dividends, sale proceeds of assets,
pensions received from abroad etc. is credited to RFC accounts. Funds in RFC
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accounts can be remitted abroad for any bona fide purpose of the account
holder or dependants. It can be used for making local payments also.
The following accounts were applicable to NRIs prior to April 2002 which are
presently discontinued as per RBI.
Non-resident (Non-reportable) Rupee Deposit Accounts (NRNR
Accounts):-
This account could be opened by NRIs, PIOs and OCBs by transfer of freely
convertible foreign currency funds from abroad, or from NRE/FCNR accounts.
Deposits can be held jointly with a resident and can be for period from 6
months to 3 years, and can be renewed further. The principal is non-
repatriable; interest can be repatriated. There is no income tax on the
interest.
Non-Resident (Special) Rupee Accounts:-
NRIs/PIOs have the facility to maintain bank accounts and undertake
financial transactions in India subject to certain exchange control
regulations. In order to simplify the procedures and to provide greater
freedom to NRIs/PIOs for putting through financial transactions in India, NRIs
and PIOs were permitted to open bank accounts in India, which would be at
par with rupee accounts, maintained by residents. They could open Non-
Resident (Special) Rupee Accounts with banks in India which had the same
facilities and restrictions as are applicable to rupee accounts maintained in
India by residents relating to repatriation of funds held in these accounts
and/or income/interest earned on them. The scheme provided that the
procedure for opening such accounts would be same as that of domestic
accounts of resident individuals.
Procedure for Opening a Non-Resident (NRI) Accounts in India:-
15
Many banks provide the facility to open an NRE/FCNR account from overseas,
by downloading the form from the website of the bank of their choice.
Generally, the account opening form must be accompanied by
A passport copy,
The visa or residence permit of the country the NRI is residing in, and
A set of 2 photographs
The signatures on the form have to be verified by either officials at the
Indian Embassy or consulate in the country of his residence or the Notary
public. In case the particular bank has an overseas branch in the applicant’s
city, documents can be verified at that office.
The initial remittance must be sent along with the documents.
NRIs can empower a local citizen to operate their domestic accounts through
a Power of Attorney or a letter of authority. NRIs can appoint nominees,
resident Indians or otherwise, to their account.
Major banks offering different types of accounts to NRI’s:-
Axis Bank HSBC Bank Kotak Mahindra Bank
Bank Of Baroda ICICI BankOriental Bank Of
Commerce
Canara Bank IDBI Bank Punjab National Bank
Central Bank Of
IndiaIndian Bank
Standard Chartered
Bank
CitibankIndian Overseas
BankState Bank Of India
Corporation Bank IndusInd Bank Union Bank Of India
HDFC Bank ING Vysya Bank United Bank Of India
ABN AMRO Bank Allahabad Bank Andhra Bank
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Bank of India Bank of
Maharashtra
Centurion Bank of
Punjab
Central Bank of
India
Karur Vysya Bank
Ltd.
UCO Bank
Dena Bank South Indian Bank
Ltd.
Vijaya Bank
Economic Impact of Remittances:-
Remittances and flow of funds from migrant workers to their home countries
have become a major source of resources in developing and emerging
economies. These remittances from NRIs and deposits maintained by them
form a substantial part (about 23%) of our external reserves. For some
smaller economies they form an even larger segment of external reserves.
These remittances & deposits contribute to the growth & development of the
economy as more and more capital is available which can be used for
various beneficial purposes. The foreign currency received can be lent in the
international market which will earn good amount of interest to the lender.
Also, a good amount of commission can be earned on exchanges. The loss
which the institutions suffer in the event of exchange of currency can also be
minimized as foreign currency will be available freely in the form of deposits.
All these things lead to growth & profitability of the business. Indirectly, it
will generate employment in the economy because the requirement of the
manpower to serve the customers will increase when the depositors will
increase. It also helps in maintaining the Balance of payment. Directly or
indirectly, it is the economy of the country which is benefitted as the money
available will be used in favour of the economy only.
Interest rates:-
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The rate of interest of different banks on all accounts maintained by NRI’s is
same. Given below are the interest rates of HDFC Bank as on 1st May 2010
which are provided by these banks on different accounts.
NRE A/C
Savings
A/c
Fixed Deposit
3.5% PER
ANNUM
Period Interes
t Rate
Annualised rate Per
Annum
(compounded
quarterly)
1 Year to less than
2 Years
2.77% 2.79%
2 Years to less
than 3 Years
2.95% 2.98%
3 Years to 5 Years 3.50% 3.55%
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NRO A/C
Interest earned on NRO Savings Account / NRO Fixed Deposit is subject to Tax
deduction at source*.W.e.f Aug 09, applicable TDS rates are:
NROTax Rate
Surcharge
Education Cess
Total
Payment up to Rs 10 Lakh 30% - 3% 30.90%
Payment equal to and above Rs 10 lakh
30% 10% 3% 33.99%
Savings A/c
Fixed Deposit(Below Rs.15 lakhs)
3.5% PER
ANNUM
PeriodInterest Rate (per annum)
PeriodInterest
Rate (per annum)
7 - 14 days 2.25%
15 - 29 days 2.25%
30 - 45 days 3.00%
46 - 60 days 3.50%
61 - 90 days 3.75%
91 Days to less than 6 months 1
day4.50%
6 months 1 day - 6 months 15 days
5.50%
6 months 16 days 5.50%
6 months 17 days - 9 months 15
days5.50%
9 months 16 days 6.00%
9 months 17 days - 1 Year
5.75%
1 year 1 day - 1 year 15 days
6.50%
1 year 16 days 6.75%
1 year 17 days - 2 years
6.50%
2 years 1 day - 2 years 15 days
7.00%
2 years 16 days 7.25%
2 years 17 days - 3 years
7.00%
3 years 1 day - 5 years
7.50%
5 years 1 day - 8 years
7.50%
8 Year 1 Day - 10 Years
7.50%
FCNR
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Period USD GBP Euro JPY AUD CAD
1 Yr to < 2 Yrs 2.02% 2.37% 2.22% 1.67% 6.50% 2.57%
2 Yrs to < 3 Yrs 2.20% 2.75% 2.43% 1.48% 6.42% 3.17%
3 Yrs to < 4 Yrs 2.76% 3.28% 2.74% 1.53% 6.61% 3.68%
4 Yrs to < 5 Yrs 3.25% 3.69% 3.05% 1.60% 6.85% 4.04%
5 Yrs only 3.66% 4.02% 3.33% 1.70% 6.96% 4.30%
RFC A/C
Period GBP USD EURO JPY
< 29 Days 0.65% 0.25
%
1.00% 0.25%
30 days - 3 Months 1.25% 0.50
%
1.25% 0.25%
3 Months 1 day - 6 Months 1.50% 1.25
%
1.50% 0.25%
6 Months 1 day - < 1 Year 1.75% 1.75
%
1.75% 0.25%
1 year - < 2 years 2.37% 2.02
%
2.22% 1.67%
2 years - < 3 years 2.75% 2.20
%
2.43% 1.48%
3 years only 3.28%
.
2.76
%
2.74% 1.53%
FOREIGN EXCHANGE DEPARTMENT OF RBI:-
20
With the introduction of the Foreign Exchange Management Act 1999,
(FEMA) with effect from June 1, 2000, the objective of the Foreign Exchange
Department has shifted from conservation of foreign exchange to
"facilitating external trade and payment and promoting the orderly
development and maintenance of foreign exchange market in India".
The new Act has brought about structural changes in the
exchange control administration. Regulations have been framed
for dealing with various types of transactions. These regulations
are transparent and have eliminated case-by-case approvals.
All current account transactions are free from restrictions except
8 transactions prohibited by the Government of India.
11 transactions which require prior permission of the
Government of India and
16 transactions on which indicative limits are fixed by the
Government and release of foreign exchange beyond those
limits requires permission from the Reserve Bank. All
Regional Offices of the Department have in turn been
authorized to release exchange for such transactions.
For capital account transactions, the Reserve Bank regulations
provide for general permissions/automatic routes for investments
in India by non-residents, investments overseas by residents and
borrowings abroad, etc.
The Department ensures timely realisation of export proceeds
and reviews, on a continuous basis, the existing rules in the light
of suggestions received from various trade bodies and exporters'
fora.
The Department collects data relating to forex transactions from
authorised dealers on a daily basis for exchange rate
management and on a fortnightly basis for monthly quick
21
estimates of balance of payments and quarterly balance of
payments compilation.
The Department lays down policy guidelines for risk
management relating to forex transactions in banks.
The Department is also entrusted with the responsibility of
licensing banks/money changers to deal in foreign exchange and
inspecting them.
There is a "Standing Consultative Committee on Exchange
Control" consisting of representatives from various trade bodies
and authorised dealers which meets twice a year and makes
recommendations for policy formulation.
With a view of further improving facilities available to NRIs and
removing irritants, the Department is also engaged, on an
ongoing basis, in reviewing and simplifying the procedures and
rules
Borrowings from NRIs/ Person of Indian Origin by Indian nationals:-
Reserve Bank of India has granted general permission w.e.f. March 30, 1999
to the Resident Indian / proprietorship / partnership firms to avail of interest
bearing rupee loans from NRIs/PIOs on non repatriable basis. This permission
is subject to compliance with the following conditions,
1. The rate of interest of such loans should not exceed 2 percentage
points over the Bank Rate prevailing on the date of granting the loan.
2. The maturity period of the loan should not exceed 3 years.
3. The loan can be granted out of funds remitted from abroad in foreign
exchange through normal banking or out of NRE/FCNR/NRO/NRSR
accounts maintained with authorized dealers in India. The payment of
interest /repayment of loans should be made by credit to NRO/NRSR
accounts of the Non Resident lender.
22
In case where the loan was granted out of funds held in NRSR account
of the lender, the repayment of loan or repayment of interest should
be made by credit to NRSR accounts of the lender.
4. The principal amount of the loan will not be repatriable.
5. The loan cannot be raised for the purpose of carrying out
agricultural/plantation activity or for purchase of immovable
property /shares/debentures / bonds or for re-lending.
Portfolio Investment Scheme (PIS):-
This is similar to the NRE/NRO savings a/c. The NRI can trade in the
secondary stock market with Repatriation (from NRE PIS a/c) and on non-
repatriation basis(from NRO PIS a/c). Demat a/c and Trading account is also
mandatory after opening of PIS account to carry out trading and maintain
shares in demat form. The application of PIS is to be submitted to a
designated branch of an authorized dealer in India in the prescribed form.
Reserve Bank has authorized a few branches of each authorized dealer to
conduct the business under Portfolio Investment Scheme. NRIs will have to
route their applications through any of the designated authorized dealer
branches who have been authorized from Reserve Bank. The banks active in
PIS business are Axis, HDFC & ICICI Bank.
23
24
2. RESEARCH OBJECTIVES
NRI’s today are depositing their savings in India because of the attractive
interest rates & good opportunities in India as compared to the facilities in
foreign countries. Major banks in India are offering various facilities to NRI’s
for depositing money in various accounts.
This study is thus conducted to find out the various services, market share
and the strategies adopted by some of the major players in this field like SBI,
HDFC, ICICI, Corporation Bank, Axis and comparing the results with IDBI Bank
with the motive to find out various gaps in the NRI business of this bank and
then giving suggestions for attracting more and more NRI’s to deposit in this
bank.
This report highlights total NRI business in India, the benefits and various
accounts which can be opened by NRI’s and the competition among various
banks on the basis of services provided, the competition faced by IDBI Bank
& various recommendations for attracting more and more NRI’s has been
covered.
25
3. RESEARCH METHODOLOGY
In order to achieve the objectives of the research, the information is
collected from various sources, major part being the internet. Various types
of accounts, interest rates and other facilities of the banks are considered.
Various rules and regulations of RBI, FEMA concerning this have also been
found through the same mode.
Apart from this, visit to the corporate offices and the branches of these
banks were made from time to time in order to extract the information
regarding the facilities & strategies. This was only possible after interaction
with the NRI Department of all these banks.
The guidance of the mentor as well as the employees was taken on regular
basis to find out various facts and correlate the findings in the event of
research.
Also, various books were referred to develop the concept.
26
4. ANALYSIS
In this part, the comparison of the major banks like SBI, HDFC Bank, ICICI
Bank, Corporation Bank, Axis Bank and IDBI Bank is made on the basis of the
various accounts & sub-accounts and the services which are associated with
each of these accounts. Also, a brief summary on the market share,
strategies adopted, international presence and other outstanding benefits
are covered to get clear distinction.
STATE BANK OF INDIA
SBI provides a range of banking products through its vast network in India
and overseas, including products aimed at NRIs. The State Bank Group, with
over 16000 branches, has the largest branch network in India. With an asset
base of $260 billion and $195 billion in deposits, it is a regional banking
behemoth. It has a market share among Indian commercial banks of about
20% in deposits and advances, and SBI accounts for almost one-fifth of the
nation’s loans. The bank has 131 overseas offices spread over 32 countries
as on 31st Dec 2009. It has branches of the parent in Colombo, Dhaka,
Frankfurt, Hong Kong, Johannesburg, London and environs, Los Angeles, Male
in the Maldives, Muscat, New York, Osaka, Sydney, and Tokyo. It has offshore
banking units in the Bahamas, Bahrain, and Singapore, and representative
offices in Bhutan and Cape Town.
The various types of accounts options at SBI are-
1. NRE [ Non-Resident External ] Account :-
The various types of account in NRE A/c are:-
Savings A/C
Current A/C
Term Deposit
Special Term Deposit
27
Recurring Deposit
The various types of benefits in different accounts include Multi-city cheque
book, Internet Banking, Inter-national Debit card, Safety, Liquidity,
Premature withdrawal, Transferability, Timely Payment of Interest, Automatic
Renewals, Flexibility etc.
ATM GOLD DEBIT CARD:-This card is available to all NRI customers with minimum quarterly
balance of Rs.50000. It is free of cost and zero annual maintenance charges.
Savings
A/C
Current
A/C
Term
Deposi
t
Special
Term
Deposit
Recurring
Deposit
Min Bal
MCC
Internet
Banking
Inter-
national
Debit
card
Rs.1000
Personal
Banking-
Rs.5000
YES, Rs.3
per leaf
Limit 2lakh
YES
YES
Low
O/D
facility
YES,
Rs.3 per
leaf
Limit
2lakh
YES
YES
Rs.100
0 1 to
5 years
Interest
paid
quarter
ly
Rs.1000
1 to 5
years
Interest
compound
ed every
quarter
YES
Invest a fixed
sum monthly
and draw the
total amount
with interest
on maturity
2. NRO [ Non-Resident Ordinary ] Account :-
The various types of account in NRO A/c are:-
Savings A/C
Current A/C
Term Deposits
28
Recurring Deposits
Min Bal
Facilities
Rs.1000
Multi-City Cheque, International Debit Card
& Internet banking
3. FCNR [ Foreign Currency Non-Resident (B) ] Account :-
Currencies
Acceptable
Min Deposit
Facilities
US dollar, Euro, Sterling, Pounds, Canadian
dollar, Australian dollar and Japanese Yen.
USD 1000 or equivalent, minimum of 1 year
and a maximum of 5 years
Nomination facility (can be a resident Indian),
International Debit Card & Internet banking.
4. RFC [ Resident Foreign Currency ] Account :-
The various types of account in RFC A/c are:-
Savings A/C
Current A/C
Term Deposits
Currency Acceptable
Min Deposit
Maintained in US$ but withdrawal only in Indian
currency i.e. rupees
Term deposits can be maintained from 1 to 3
years with minimum 1000 US$
29
SBI is the first bank to launch NRI services. It holds approximately 25%
market share of total NRI business. It is due to its mutual trust among people
and being the largest public sector bank. It is present in 30 countries & has
70 foreign offices, making its presence all over the world. The transfer
charges are less as compared to other banks. They do not go for any
advertisement which focuses especially on the NRI services.
HDFC BANK
HDFC Bank is a major Indian financial services company based in Mumbai,
incorporated in August 1994, after the Reserve Bank of India allowed
establishing private sector banks. The Bank was promoted by the Housing
Development Finance Corporation, a premier housing finance company of
India. HDFC Bank has 1,412 branches and over 3,295 ATMs, in 528 cities in
India, and all branches of the bank are linked on an online real-time basis. As
of September 30, 2008 the bank had total assets of INR 1006.82 billion. For
the fiscal year 2008-09, the bank has reported net profit of Rs.2244.9 crore,
up 41% from the previous fiscal.
The various types of accounts options at HDFC Bank are-
1. NRE [ Non-Resident External ] Account :-
The various types of account in NRE A/c are:-
Savings A/C
Current A/C (Ideal for ESOP’s)
Fixed Deposit
30
2. NRO [ Non-Resident Ordinary] Account:-
The various types of account in NRO A/c are:-
Savings A/C
Current A/C(Ideal for FCB’s)
Fixed Deposits
31
Savings A/C Current A/C Fixed Deposit
Min Bal
Cheque Book
Internet Banking
Inter-national
Debit card
Transfer Fees & Charges
Rs.10,000(Urban)
Rs. 5,000 (Semi-Urban)
Yes, FREEYes
Yes, Rs.100 issue &
maintenance fees
Rs. 10,000, Rs. 25000-
Average Quarterly Yes, FREE
Yes
Yes, Rs.100 issue & maintenance
fees
Initial Deposit: Rs.
25,000, Add-on
Deposits: Rs. 10,000
Min 1 year to Max 5 years
No, No cheque
bookUp to Rs.50000-NIL
Above Rs.50000-0.40 per 1000
Savings A/C Current A/C Fixed Deposit
Min Bal
Cheque BookInternet Banking
ATM & Debit card
Transfer Fees & Charges
Rs.10,000 (Urban)Rs. 5,000 (Semi-
Urban)
Yes, FREEYes
Yes, Rs.100 issue & maintenance fees
Up to Rs.50000-NIL Above Rs.50000- Rs.2.90 per 1000
Rs. 10,000, Rs. 25000-Average Quarterly Yes, FREE
Yes
Yes, Rs.100 issue & maintenance fees
Initial Deposit: Rs. 25,000,
Add-on Deposits: Rs.
10,000 7 days to 10
years, Interest credited every
3 monthsNo
Up to Rs.50000-NIL Above Rs.50000-Rs.0.40 per 1000
3. FCNR [ Foreign Currency Non-Resident (B) ] Account:-
Currencies Acceptable
Min Deposit
Facilities
US dollar, Euro, Sterling, Pounds, Canadian dollar, Australian dollar and Japanese Yen.
USD 1000 or equivalent, add-on deposit USD 1,000 or equivalent, Min 1 year to Max 5 yearsNomination facility, deposit jointly with other
NRIs
4. RFC [ Resident Foreign Currency ] Account :-
The various types of account in RFC A/c are:-
Savings A/C
Fixed Deposits
Savings A/C Fixed Deposits
Currencies acceptable
InterestInternet banking
USD, EURO, GBP & JPY but withdrawal in Indian rupees Credited quarterlyYes
USD, EURO, GBP & JPY but withdrawal in Indian in rupees, Max- 3 Years Credited quarterly
Other accounts-
Super Saver A/C Sweep-in A/C Rupee Max A/C
Type of A/C
Purpose
Tenure
Add-on deposit
Other Benefits
Fixed Deposit
Liquidity of Savings A/C and
high interest rates.
Linked to the deposit
Rs.25000Overdraft Facility,
High interest rates, Cheque book
Fixed Deposit
Takes care of deficit in NRI
Savings / Current A/C by linking
without losing out on interestLinked to a
Savings / Current Account
N.A.Cheque book and ATM/Debit card
FCNR
Forward cover product that
converts foreign
currency investments
in INR maintained in
rupees1,2 or 3 years
----Min Deposit
32
amount - USD 1000/ GBP 2500/ Euro
2500, No lock-in period,
Higher yield
HDFC Bank was declared as the most Technology-friendly Bank at the
Business World Best Bank Awards announced in May. These annual awards
are given to top performing Banks in the categories of Best Bank, Fastest
Growing Bank, Most Tech-savvy Bank, Best Banker and Lifetime
Achievement, among others. It provides better customer and exchange
services. It holds approximately 10% Market share of total NRI business. It
provides FREE monthly statements to all the NRI customers in order to make
them aware of the position of their account. Bank has its branches in Dubai
& U.K. It gives very less advertisement as it depends more on ‘word of
mouth’. It also provides online counseling services to NRI customer to solve
their doubts, saving their time and serving them when they are abroad.
They also help customers to choose the best product for them by asking few
questions online which are related to their needs and expectations. An
employee from bank, on request, also visits the customers when they are in
India, to help them by face-to-face interaction.
ICICI BANK
ICICI Bank is a major banking and financial services organization in India. The
bank has a network of 1,700+ branches and about 4,721 ATMs in India and
present in 18 countries, as well as some 24 million customers. ICICI Bank
offers a wide range of banking products and financial services to corporate
and retail customers through a variety of delivery channels and
specialization subsidiaries and affiliates in the areas of investment banking,
life and non-life insurance, venture capital and asset management. ICICI
Bank is also the largest issuer of credit cards in India. The Bank is expanding
33
in overseas markets and has the largest international balance sheet among
Indian banks. The Bank is now targeting the NRI (Non-Resident Indian)
population.
The various types of accounts options at ICICI are-
1. NRE [ Non-Resident External ] Account :-
The various types of account in NRE A/c are:-
Savings A/C
Fixed Deposit
Recurring Deposit
Savings A/C Fixed Deposit Recurring Deposit
Min Bal International ATM-Debit cardInternet BankingMandate Card
Rs.15000 Yes
Yes
Yes
Rs.25000, 1year to 10 years
Rs.5000 to Rs.100000 Multiples of Rs.1000
Yes
2. NRO [ Non-Resident Ordinary] Account :-
The various types of account in NRO A/c are:-
Savings A/C
Fixed Deposits
Recurring Deposits
Savings A/C Fixed Deposit Recurring DepositMin Bal
ATM Card
Internet Banking
Rs.15000
Yes, Rs.200 annual charges
Yes
Rs.25000, 15 days to 10
years
Rs.5000 to Rs.100000 Multiples
of Rs.1000
Yes
3. FCNR [ Foreign Currency Non-Resident (B) ] Account :-
34
Currencies Acceptable
Min Deposit
Facilities
USD, GBP, EUR, JPY, AUD, CAD
USD= GBP= EUR=1000, AUD=CAD=2000, JPY=200000, Min 1 Year to Max 5 Years
Automatic renewal on maturity, Electronic Deposit Confirmation Advise (E- DCA) on e-mail ID within 1
working day
4. RFC [ Resident Foreign Currency ] Account :-
The various types of account in RFC A/c are:-
Savings A/C
Fixed Deposits
Savings A/C Fixed Deposits
Currencies Acceptable
Min Bal
USD, GBP USD, GBP, EUR and JPYUSD=GBP= EUR 1000,
JPY 200000, Min 30 days to Max 3 years
Other accounts-
Rupee Plus Plan
Seafarer A/C
Student A/C
NRI Edge
Purpose
Currencies acceptable
Min Bal
Tenure
Earn higher returns on deposits than NRE FD
USD/GBP/EUR
USD=EURO=2500 / GBP 1000 / Rs 100000
1 year and 1 day
Manage finances while sailing away from home, Easy Access and Monitoring
Rs.15000
Free Money Transfer
Manage finances in easier manner & get Attractive Exchange Rates
Rs.5000 Free Money Transfers, Easy Access and Monitoring
Bouquet of features on all NRI based products and services,Free Inter-national ATM-cum-Debit card, withdrawal up to Rs.100000, Free multi-city cheque-book, Insurance benefits.
35
NRI SMART SAVE DEPOSIT
NRO FD PLUS Global Indian A/C
meNRI
Free collection facility for NRI customers to transfer their deposits from other banks to invest in ICICI,Lifetime Free inter-national credit card,
insurance cover
Get a high post tax yield through lower tax rates, Advantage of
Double taxation avoidance agreement
between India & other countries, Available on new & existing NRO-
FD A/C
For NRI living in UK,
convenience of opening both an NRE Rupee A/C & an UK Current A/C,
Access to banking
facility, Instant onlineremittance facility from the UK Current A/C to the NRE
A/C
For NRI living in UAE, ICICI-NRI Services and
meBANK joined hands to give a one-stop shop facility, Debit
cards and cheque books,
Internet banking
ICICI Bank won World Finance 2009 banking awards for best NRI services
bank. ICICI bank has approximately 30% market share of total NRI business.
It provides Free P.O. Box facility to all the customers so that they can
contact bank without any charge. It has its branches in Newyork. A special
website money2india.com of ICICI bank provides facility to the general
public for money transfer. Bank account holders get quick service at few
charges when they use this website to transfer money. It also has ‘NRI
Engage’ to strengthen relations with NRI’s by providing newsletter centered
on information related to NRI investments. It gives advertisements in
September & October as most NRI visit India in that period. It gives
Electronic Deposit Confirmation to every customer after the transaction is
done. It also provides online counseling services to NRI customer to solve
their doubts, saving their time and serving them when they are abroad. An
employee from bank, on request, also visits the customers when they are in
India, to help them by face-to-face interaction.
CORPORATION BANK
36
Corporation Bank started its journey in the name of the Canara Banking
Corporation (Udupi) Ltd in 1906 with a sum of Rs. 5000 only in a small town
of Udupi near the city of Mangalore in Karnataka. Corporation bank merged
with the Bank of Citizens in 1961. In April 1980, it was given a status of
nationalized bank. Currently it is one of the well-recognized Public Sector
Banks in India. It runs more than 600 ATMs extending across 21 States and 2
Union Territories. In the field of personal banking services, any customer can
seek services like Corp Pragathi Account, Current Account, Term Deposit, EMI
/ Deposit Maturity Calculator, Home Loan and Insurance, Savings Bank A/C
and Loans. This bank assists in the sale of gold coins and bars. For NRI
customers, the Corporation Bank arranges for Speed Cash and Speed
Remittance, Corp Quick Remit, loans, deposits and portfolio services. Forex
Facilities for Residents, NRIs & PIO’s are also available.The various types of
accounts options at Corporation Bank are-
1. NRE [ Non-Resident External ] Account :-
The various types of account in NRE A/c are:-
Savings A/C
Current A/C
Fixed Deposit
Recurring Deposit
Savings A/C Current A/C
Fixed Deposit
Recurring Deposit
Min Bal
MCC
Internet Banking
ATM-cum-Debit card
Rs.500
Yes
Yes
Yes
Low
Yes
Yes
Yes
Rs.1000, 1 to 10 years
Invest a fixed sum monthly and draw the total amount with interest on maturity
37
2. NRO [ Non-Resident Ordinary] Account :-
The various types of account in NRO A/c are:-
Savings A/C
Current A/C
Fixed Deposits
Recurring Deposits
Savings A/C Current A/C Fixed Deposit Recurring Deposit
Min Bal
MCC
Internet Banking
ATM-cum-Debit Card
Rs.500
Yes
Yes
Yes
Low
Yes
Yes
Yes
Rs.1000, 7 days to 10
years
Invest a fixed sum monthly and draw the total amount with interest on maturity
3. FCNR [Foreign Currency Non-Resident (B) ] Account:-
Currencies AcceptableMin Deposit
Facilities
Pound Sterling, US Dollar, Japanese Yen, Euro, Canadian Dollar and Australian Dollar
USD 1000 or equivalent, Min 1 year to Max 5 yearsJoint Account (with NRI’s), International Debit Card &
Internet banking.
4. RFC [ Resident Foreign Currency ] Account :-
The various types of account in RFC A/c are:-
Savings A/C
Fixed Deposits
Savings A/C Fixed Deposits
Currencies AcceptableMin Bal
USDUSD 250
USDUSD 1000, Min 1 year to
Max 3 years
38
Corporation Bank has limited number of NRI depositors. Due to less number
of accounts and facilities, few of NRI’s deposit money with them. It holds
approximately 5% market share of total NRI business. They do not lay much
emphasis on NRI’s. It does not provide any free account statements or any
other extra services like online counseling, face-to-face interaction etc. They
do not give any advertisement focusing NRI’s. Therefore the NRI customer
base of Corporation Bank is limited.
AXIS BANK
Axis Bank, formerly UTI Bank, is a financial services firm that had begun
operations in 1994, after the Government of India allowed new private banks
to be established. The Bank was promoted jointly by the Administrator of the
Specified Undertaking of UTI, LIC, GIC, NIC etc. UTI holds a special position in
the Indian capital markets. The bank changed its name to Axis Bank in April
2007 to avoid confusion with other unrelated entities with similar name. At
the end of March, 2010, the Bank has a very wide network of more than
1000 branches and Extension Counters. The Bank has a network of over
4055 ATMs.
The various types of accounts options at Axis Bank are-
1. NRE [ Non-Resident External ] Account :-
The various types of account in NRE A/c are:-
Normal Savings A/C
Prime Savings A/C
Current A/C
Term Deposit
Priority A/C
Normal A/C
Prime A/C Current A/C
Term Deposit
Priority A/C
39
Min Bal
Internet Banking
MCC
Debit Card
Rs.5000
Yes
Free
Rs.95-issue charges
Rs.25000
Yes
Yes
FREE(inter-national)
Rs.10000
Rs.10000, 3 years to 10 years
Min Avr Bal Quarter-
Rs.1lakh in SB A/c OR Min
Avr Rs.5 lakh in
combination SB + TERM
depositFREE(inter-national)
Priority A/c has various other features like Priority Banking Lounge,
Dedicated Relationship Manager, preferential pricing on foreign exchange
rates, discounted rate of 25% on annual fees for availing locker facilities,
Mobile banking etc
2. NRO [ Non-Resident Ordinary ] Account :-
The various types of account in NRO A/c are:-
Normal Savings A/C
Prime Savings A/C
Current A/C
Term Deposit
Priority A/C
Normal A/C
Prime A/C Current A/C
Term Deposit
Priority A/C
Min Bal
Internet Banking
MCC
Debit
Rs.5000
Yes
Free
Rs.95-
Rs.25000
Yes
Yes
FREE
Rs.10000
Rs.10000, 7 days to 10 years
Min Avr Bal Quarter-Rs.1lakh in SB A/c OR Min Avr Rs.5 lakh in combination SB + TERM deposit FREE(inter-national)
40
Card issue charges
(inter-national)
3. FCNR [ Foreign Currency Non-Resident (B) ] Account :-
Currencies Acceptable
Min Deposit
USD, GBP, EUR, JPY, AUD, CAD
USD 1000 or equivalent, Min 1 Year to Max 5 Years
4. RFC [ Resident Foreign Currency ] Account :-
The various types of account in RFC A/c are:-
Savings A/C
Fixed Deposits
Savings A/C Fixed Deposit
Currencies Acceptable
Min Bal
USD, GBP, EURO, AUD and CAD
USD, GBP, EURO, AUD and CAD
USD 1000 or equivalent, 30 days
to 5 years
Other accounts-
NRE Salary A/C Portfolio Investment Scheme(PIS) A/C
Establishments with a minimum of 10 NRI employees can opt for NRI salary accounts to provide world class banking facilities to their
employees, Free Multicity Cheque Books & International Debit Card,
Allows NRIs to invest in shares of Indian companies, in secondary market, in respect of shares or convertible debentures sold or purchased through a registered
stock broker on a recognized stock
41
Personal Accident Insurance Cover of Rs. 2 Lakh, Free Internet Banking,
Tele-banking & Monthly Email statements
exchange, Low Min Bal Rs 5,000, Low cost of transaction, Account
maintenance charge of Rs 1,000 & Free Internet Banking
Axis Bank has very good infrastructure facilities. It holds approximately 15%
market share of total NRI business. The relationship manager is in regular
touch with all the customers. Also NRI help desk has been setup for solving
the problems of people. NRI Local Post Box is there for the customers for
sending documents to the bank. It gives advertisements focusing NRI’s in
November, December & January as most of the NRI’s visit India at that time.
An employee from bank, on request, also visits the customers when they are
in India, to help them by face-to-face interaction.
IDBI BANK
IDBI Bank offers attractive interest rates, vast network, excellent service and
a complete suite of products make IDBI Bank the preferred bank for NRI’s.
The various types of accounts options at IDBI are-
1. NRE [ Non-Resident External ] Account :-
The various types of account in NRE A/c are:-
Savings A/C
Current A/C
Fixed Deposit
Savings A/C Current A/C Fixed Deposit
42
Min Bal
Interest
Cheque book
International ATM cum Debit
Card
Online account statement
Rs.5000
Compounded quarterly
Yes
Yes
Yes
Rs.10000
Compounded quarterly
Yes
Yes
Rs.10000, 1 year to 3
years
Compounded quarterly
2. NRO [ Non-Resident Ordinary ] Account :-
The various types of account in NRO A/c are:-
Savings A/C
Current A/C
Fixed Deposit
Recurring Deposit
Savings A/C Current A/C Fixed Deposit Recurring Deposit
Min Bal
Interest
Cheque book
International ATM cum
Debit Card
Online account
statement
Rs.5000
Compounded quarterly
Yes
Yes
Yes
Rs.10000
Compounded quarterly
Yes
Yes
Rs.10000, 15 days to 10
yearsCompounded
quarterly
Rs.100 per month
Compounded
quarterly
43
3. FCNR [ Foreign Currency Non-Resident (B) ] Account :-
Currencies Acceptable
Min DepositInterest
USD, GBP, EUR, AUD, CAD
USD 1000 or equivalent, Min 1 Year to Max 5 Years
Initial interest is paid after one year and subsequently after every six months
4. RFC [ Resident Foreign Currency ] Account :-
The various types of account in RFC A/c are:-
Savings A/C
Current A/C
Fixed Deposits
Currency Acceptable
Min Deposit
Interest
Facilities
USD, GBP, EUR & JPY
USD 1000(for FD), up to 3 years
Compounded quarterly
Cheque book with SB A/c, International ATM cum Debit Card, Online account statement
Other accounts-
Super Savings
A/C
Galaxy Silver A/C
Power Plus A/C
Preferred A/C
Royale A/C
Average Quarterly Balance
International
ATM/Debit Card
Cheque Book, Internet &
Rs.5000
Rs.99(annual fee)
FREE
Rs.25000
Yes
FREE
Rs.50000
Free
FREE
Rs.100000
Free(Gold)
FREE
Rs.300000
Free(Platinum)
FREE
44
Phone banking
IDBI Bank has very less NRI customers. It holds approximately 0.2% market
share of total NRI business. It has a branch in Dubai but its services are
limited to wholesale banking only. It does not have any representative
offices in other countries. It provides Insta Online service by which NRI’s can
open NRI account immediately from home or office and customer gets
immediate receipt of account number. It goes for advertisement in the
month of June & July at Kerala as it is the time of festival-‘Onam’ and most
NRI’s visit Kerala at this time. It also organizes various camps and offer gifts
and extra facilities on opening of new accounts at this time. It also launched
Portfolio Investment Scheme services in Kochi which would enable NRIs and
Persons of Indian Origin to invest in secondary capital market. More than 40
brokers in Kerala and other parts of the country along with NRIs attended
the conference in March 2010. Advertisement in rest of the parts of the
country is given in the month of November, December and January as it is
the time when most of the NRI’s visit India. It does not provide any online
counseling services. The bank, on request, also contacts the customers
when they are in India.
45
5. FINDINGS
After the whole study, it has been depicted that ICICI Bank is the leader in
this field followed by SBI. SBI is enjoying a good share because of it mutual
trust among the people and being the first one to start NRI services. ICICI
Bank, Axis Bank & HDFC Bank holds good share because they provide the
facilities as suited & expected by the customers. They pay more and more
attention on the customers and keep them happy by providing different
services. They are in regular touch and have specialized branches & desk to
help them. They lay emphasis on making new customers and retaining
existing once. Their international presence, basket of services & brand
image is the key to their success. Corporation Bank has less market share
because it does not pay attention on enhancing it business. It has its few
traditional accounts & customers and has not yet extended its facilities.
IDBI Bank has to face very tough competition in enhancing its business. As it
is seen that the interest rates of all the banks are more or less same, the
basic difference lies between the minimum balance, the services offered
and the charges on these services. IDBI Bank thus suffers on the parameters
related to these due to which it has very less NRI customers. Firstly, the
branches and the representative offices of the bank in foreign countries are
not present due to which it is far behind the reach of NRI’s. Secondly, the
types of accounts offered to NRIs are less due to which it cannot satisfy the
needs of each and every customers. Thirdly, various facilities like online
counseling, product selection etc are not present as compared to other
banks. Fourthly, the advertisements of this bank are very less due to which
many of the customers may not even know of the various services provided
by the bank. Any of the mechanism which can be used to find out the likes &
dislikes of the customers and feedback system is also not there. The various
46
ways to keep the customers informed and maintain contacts with them like
newsletters etc are absent. Bank also has the lack of infrastructure facilities.
It does not have any specialized branches & help desk for NRI’s in India as
other banks have it. The existence of these matters a lot as it is the way to
please the customers and attract them towards the banks.
47
6. LIMITATIONS
Though the emphasis has been laid on maintaining accuracy and minimizing
the errors in the collection & analysis of data, yet there were some
limitations faced during the study.
Limitations as far as the study is concerned are-
The management of the all the offices were not interested in
interacting as they got the clue that the information is collected for
some research project.
Information like number of customers, amount of deposits etc was not
provided.
As the secondary data and the approximate figures were taken into
consideration, it became quite difficult to get the actual picture.
The policy of the banks to maintain secrecy was the main hindrance in
collection of data.
Due to shortage of time, an exhaustive research/competitor analysis
could not be carried out
48
7. RECOMMENDATIONS
As it is seen that the basic difference between all the competitor banks lies
in the services provided and the way of handling customers, IDBI Bank can
improve its business by making changes and extending some of its facilities.
The various steps which IDBI Bank can take in order to enhance its NRI
business and acquire a good market share are -
Improvement of the infrastructure is most important as it attracts
customer the most.
The branches and the representative offices of the bank should be set
up in foreign countries so that it is in the reach of NRI’s residing in
different parts of the world.
Specialized branches & help desk for NRI’s in India should be set up to
facilitate them.
Various modes of operating account like Internet Banking, Phone
Banking etc should be associated with all types of accounts.
The Advertisements should be given from time to time and especially
in November, December and January at large scale as it is the time
when most of the NRI’s visit India.
Some extra benefits like free ATM card, Cheque book, less remittance
charges etc can be associated with the accounts.
The type of accounts and services with certain related benefits may be
increased so that customers feel important and can satisfy their
multiple needs.
Various facilities like online counseling, with tailor made
product/solution etc should be introduced so that customer can get
accurate information by saving time & cost.
49
Proper mechanism to find out the likes & dislikes of the customers and
get feedback of the services rendered should be used as it will act as
the mirror of performance & basis of improvement.
Statements of accounts, annual reports, newsletters etc should be
used to keep in touch with the customers and also keep them
informed.
A database of NRI’s can be prepared and they can be made aware with
the various services of the bank through e-pamphlets, reports etc.
50
8. REFERENCES Interactions with NRI Services Departments:-
Mr. Prashant Kumar, Relationship Manager, SBI, Mumbai
Ms. Shalaka, HDFC Bank, Mumbai
Mr. Abhijeet Kumar, Assistant Manager, ICICI Bank, Mumbai
Mr. C.Sridharan, Chief Manager, Corporation Bank, Mumbai
Mr. Deepak Gaikwad, Relationship Manager, Axis Bank, Mumbai
NRI Department, IDBI Bank, Mumbai
Text Books:-
NRI's Handbook for Banking & Investments- Second Edition-July 2004,
published by Banknet India
Brochures of all the banks
Web Pages:-
www.rbi.org.in
www.iba.org.in
www.nrionline.com
www.nriinformation.com
www.onlinesbi.com/nri/
www.hdfcbank.com/nri_banking/home.htm
www.icicibank.com/pfsuser/icicibank/ibank-nri/nrinewversion
www.corpbank.com
www.axisbank.com/nri/index.asp
www.idbi.com/products/nriservice.asp
www.finmin.nic.in
www.iibf.org.in
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www.idrbt.ac.in
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