Huge returns boost foreign banks' investment in India

Foreign annualised ROEs grew 9.9% in the six months until end-September.

Huge returns in India are encouraging foreign lenders like Citigroup, Deutsche Bank and HSBC to invest in the country, beating local banks for the first time in a decade, reports Reuters.

Foreign banks’ annualised return on equity (ROE) in the country grew 9.9% in the six months to end-September, higher than that of local banks’ 6.1% for a second consecutive half-year period, according to data from the Central Bank of India.

The boom was anchored by relaxed regulations and a surge in online banking, with some foreign banks increasing investment plans to sway rich clients away from domestic competitors.

“With transaction banking going very strong and retail banking picking up pace, a lot of foreign banks globally are now focusing on India and registering better performance,” Deloitte India financial services practice head Sanjoy Datta said.

In August last year, the Central Bank of India allowed banks under a regulatory sandbox framework to launch services such as digital customer background checks and money transfer.

Here's more from Reuters.

Photo courtesy of Pexels.com.

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