utkarsh project report

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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) 1

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Page 1: Utkarsh Project Report

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

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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

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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.

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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

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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

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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:-

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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:-

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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

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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.

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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.

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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.

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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.

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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

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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

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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$

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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

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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

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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

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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

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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 :-

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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.

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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

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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

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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

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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

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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)

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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

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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

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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

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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

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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.

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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

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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.

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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

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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.

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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.

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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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