Why Indian Banks are out performing their foreign counterparts?

The reason i believe that the Indian banks have outperformed the international banks for the reason that the Indians are of conservative nature and do not take much risks. This can be seen that the Indian banks did not have much exposure in the sub-prime securities, all the other major banks had a wrong judgement.

Also it is evident that the savings habit of the Indians is good which helped the banks with adequate funds. this is also proved when Indian got good ratings in savings habit.

There are also several other reasons like the regulatory, i.e. minimum capital requirements, etc..

But i believe that the savings habit and conservative nature is responsible for the out performance of Indian Banks...

Indian banks are more profitable and get better customer satisfaction for many reasons. One about customer satisfaction since rarely Indian bank failures occur dre to their extreme risk aversion in lending and product prolieferation. Their bread and butter operation is only in retail banking. Now some corporate bank expanded into even equities, mutual funds and isurance.

Profitable because the spread they charge between savings and lending is very high more than 10%. Foreign banks work to improve their functionality and they get only less than 1% spread. Then higher spreads are generated from innovative products they offer like mortgages, bond trading, swpas and risk is mitigated on all these using credit risk insurances and hedging.

Indian banks are less functional than foreign banks when it comes to offering solutions to customers and customers are not sophisticated enough to accept those products like their foreign couuter parts. Here in India they park their excess liability in reverse repos when foreign counterparts lend it out in the corporate market or they borrow from repo window and lends in the interbank market.

Foreign banks even lend to soverign debt markets where as Indian banks don't.

So even if we are profitable our customer orientation is poor and we are more risk averse and less productive in the credit market compared to foreign banks.

Indian banks do have only one major source for funds the retail saver where as foreign banks borrow from repo window, capital and turn them over in innovative volume products and make profits and helps in turning over commerce throgh their operations and is more valuble for the economy. Then both lend to the manufacturer and funds the consumer for the manufacturers products and creates a maket for commerce to turnaround in volumes which our banks are least interested in helping the economy.

After the Gadgetry has worn off, people need real people at the end of the Voice Recorder and the counter.

Indian Banks are doing better since they have an excess of staff and more people available to attend to customers.

Indian PSU banks cater to Aam Admi and less costly to maintain an account and operate. For example if the account balance goes below the minimum level PSU banks charge Rs 56 per quarter while private banks charge Rs 750 per month.

With Netbanking, NEFT, ATMs PSU banks are now offering better service than private banks. Service requests are better handled in PSU banks than by Private banks due to lack of knowledge of lowly paid temp staff in private banks.

Would like to know from you guys?????

Given the fact that developed countries (from where major foreign banks are based) like US, UK, EU thrive more on De-regualtion. Given this fact and last two decades of Boom and Bust cycles, this decade has seen fallen down in the form of global financial crisis is without a reasonable doubt is because of little and/or no Regulation.

India on contrary has stuck to its regulationary environment with guts...Indian financial markets are heavily regulated..u can ask any banker he will accept the same. 

Based on the aftermath of global financial crisis, we all should b glad to know we did not feel the effects felt by banks in US, UK and Europe because the Pile foundation of our Financial structure was strong.

Thus with this back ground and someone overlooking them constantly, we can rightfully say that Indian Banks are comparativey place in contrast to foreign counterparts.

Regards

Nikhil