A insight views of International Banks in Indian Banking Industry- A Critical Analysis

The New expansion banks are led by CEO, who are International leaders in a India highway with their driver license to capture the Indian Market but, mostly relying on the Financial Experts, Lawyers are appointed to assist them on due process. The new startup banks are not keeping any Chief Legal Officers, and allowing CEO/COO to run their business with high speed transactions towards a massive growth and entering into areas where-ever they see the revenues. This is where the Foreign Banks enter into a zone where these products are chosen by the management without analyzing the risks in policy change, trends in the industry.

Many International banks entering into India Market with tons of revolutionary ideas to test Indian Market by just relying on a Market Analysis Report & Financial Strength & Human Capital but forget to look deep into the Case history of Indian Banking Industry and it's SWOT- Strength, Weakness, Opportunities and Trends. Many Financials experts argue why should take a SWOT? How do my own Competitors SWOT going to help me t in product ranges? Why is the use of SWOT in the short term or long term? I can show you an example cases:

I am not undermining any of their Capacity or capabilities in them but, I am carefully placing my arguments to say:

You are in a place of Banking Industry- where you are going to learn new lessons than what you are going to teach. How?

The Government of India and Reserve Bank of India are providing various guidelines to the Banks frequently than any other governments and continuous policies impact the growth of the Banking Industries and are unable to fix any common goals for a bank. If you know the history of Indian Banking you might be looking at the SWOT than looking at your Market Analysis Reports from the Data Scientists. I am not standing as a corporate lawyer to position my arguments with the most dynamic experts in the market but, I am positioning myself not as a corporate lawyer or expert but as a customer, a common man by having my accounts in India and carefully watching the Indian Banking Industries rise and fall intact with government's policies.

19th Century Banking In India by UK/France/ US Banks

Even Bankers residing in India speak that International Banks have started expansions to India after the globalization policy 1990. But That's not the case. The British, French and USA already had a presence in India before India obtained its Independence from the British Empire. Standard Chartered Bank (1858) is oldest foreign bank in India, headquartered in London and thereafter, BNP Paribas (1860), French bank with a long history in India, focusing on trade and investment banking and further, Citibank (1902) is One of the largest U.S.-based banks, providing diverse financial services. These Foreign Banks are carefully balancing

20th Century Banking [Green, White, Industrial- Revolution Period] - Before Independence.

The colonial government introduced the Indian Rupee as the official currency in the 19th century, but the early 20th century saw greater consolidation. The 19th century was a trans-formative period for banking, driven by the Industrial Revolution, colonial expansion, and changes in financial systems across Europe, the United States, and emerging industrial economies. Bank of Baroda was started in 1908, Canara Bank was started in 1906 by Individuals from India and giving competition to the Foreign Banks. Foreign banks such as Standard Chartered, and Grindlays Bank continued to dominate trade and commerce, focusing on the needs of British businesses in India.

By 1912, the Cooperative Societies Act extended the framework to urban areas, forming the basis of cooperative banks. In 1935, the Reserve Bank of India was established as the central bank to regulate currency issuance, manage government accounts, and supervise banking activities. World War II exposed weaknesses in the banking system, leading to increased discussions about nationalization and restructuring.

20th Century Banking [Nationalization & Globalization] - After Independence.

The banking sector in India underwent a trans-formative journey after independence in 1947, shaped by government-led reforms to address socio-economic challenges and promote financial inclusion. The Nationalization Era- 14 major private banks were nationalized between 1969-1981 to align banking with national development goals by the Government of India. The Government of India has focused on Nationalization of Banks, increasing the public sector's share in banking to 91% .Nationalization ensured banking services reached under served areas.

In the Globalization Era after 1991- The Structural reforms led to a shift from a state-controlled economy to a market-driven one. The Foreign and New private sector banks like HDFC Bank (1994), ICICI Bank (1994), and Axis Bank (1994) emerged without any share control. Many Banks Introduced ATM and electronic banking, and centralized banking systems enhanced customer convenience. Globalization & Liberalization allowed Indian banks to operate internationally while foreign banks brought competition and innovation.

21th Century- Banking Industry & Revolutions.

The combination of technological innovation, regulatory reforms, and a push for financial inclusion has redefined the industry. Banks adopted internet and mobile banking platforms to enhance customer convenience and Digital wallets like Paytm, PhonePe, and Google Pay emerged, integrating with the banking system. To improve efficiency, reduce NPAs (non-performing assets), and create globally competitive banks. Notable mergers include the amalgamation of Punjab National Bank with Oriental Bank of Commerce and United Bank of India.

Banks like HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank have emerged as leaders, offering tech-driven services. Foreign players like CitiBank, Deutsche Bank, DBS Bank, First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Dubai Islamic Bank, MUFG Bank Ltd, Mizuho Bank Ltd, Sumitomo Mitsui Banking Corporation, SBM Bank,and Mauritius Commercial Bank have a niche presence in India, primarily serving high-net-worth individuals and corporations. Over 80% of the Indian population now has access to banking services and the Government of India has created serious laws to recover the Non-Performing Assets.

The DRT has the authority to enforce the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. The National Company Law Tribunal (NCLT), established under the Companies Act, 2013, is a quasi-judicial body responsible for adjudicating cases involving insolvency and Bankruptcy under the Insolvency and Bankruptcy Code (IBC), 2016 and Corporate disputes, including mergers, acquisitions, and winding up of companies.These bodies have played a critical role in restoring financial discipline, improving asset quality, and supporting the long-term health of the banking sector.

Government initiatives like the recapitalization of public sector banks and reforms in non-banking financial companies (NBFCs) are expected to further strengthen the sector. This growth is fueled by factors such as robust credit demand, advancements in digital banking, and increased public-private collaboration. As the banking industry aligns with technological advancements, areas like digital lending, risk management, and data transparency are anticipated to become focal points.

Market Size of India & New Trends & Challenges in Banking & Finance Industry:

In India, the Banking market is expected to witness a significant growth in Net Interest Income, with a projection of reaching US$459.60 billion in 2024. The Foreign Banks are anticipated to take over the Traditional Banks and further dominate the market, with a projected market volume. India's banking industry is a key driver of its economy, characterized by steady growth and increasing penetration of financial services. However, There are unseen and hidden threats and challenges for the Banks to materialist it's goals due to various scams in the Banking Industry.

The ?94,000 crore fraud is reported in connection with ABG Shipyard, a major shipbuilding company where the company allegedly misused funds secured from a consortium of banks led by ICICI Bank and SBI and the case is now pending before the National Company Law Tribunals. Banking scams are caused not by outsiders but, it is developed inside their doors. This continues ...Malaya King Fisher scam 9000 crore in 2012, Nirav Modi and Mehul Choksi with 11,400 crore fraud in 2018, Vikram Kothari has defrauded ?3,695 in 2018, Jatin Mehta, the owner of Winsome Diamonds has defrauded ?7,000 crore in 2014. Banks may not find anything suspicious until their wallet is completely taken out with some crooked tactics on lending with bogus projects, aiming high profits on unsecured loans etc.

SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats)

The presence of these global players has brought advanced technology, innovative financial products, and world-class customer service practices, contributing to the modernization of the Indian banking sector. However, this presence also highlights the need for foreign banks to adapt local trends and improve their operations to remain competitive in an increasingly globalized market. A well-structured SWOT analysis helps identify these opportunities and capitalize on them strategically. Furthermore, recognizing potential threats, such as regulatory challenges, economic instability, or aggressive competition from international banks, allows Indian banking institutions to mitigate risks and prepare for uncertainties in the market.

SWOT is a powerful strategic tool that can be crucial in identifying and preventing scams in the banking industry. Fraud often occurs due to employees not being fully trained or aware of potential scam techniques or corrupted managements. Banks with self acquired talents make nexus may fail to detect fraudulent activities promptly because the appointed management doesn't like any supervision all time. SWOT helps banks identify potential threats before they escalate into significant issues. Ultimately, SWOT analysis serves as a strategic tool that equips banks with the insights required to make informed decisions, align their business strategies, and improve operational performance.