1. Market Capital :
Compared to the global network Indian Banks are not as big. If we take SBI which is India’s largest Bank has a market Capital of $20 billion while banks which have expanded have the market capitalization of around $180 billion to $200 billion.
2. Expansion not the Primary Goal :
Considering most banks in India are under Indian Government and their primary goal is to serve rural India, they aren’t concerned about expanding globally. Before Being nationalized India’s bank had big presence outside.
3. The Choice :
India’s central bank (RBI) is very conservative in its management and makes Indian banks choose caution over expansion in asset base.
4. You are treated the way you Treat :
Our government isn’t too favorable for overseas banks looking to expand in India, there are plenty of stringent policies which makes it tough for foreign banks to expand here as a result Indian banks don’t get favorable treatments outside.
5. Lack of Trust :
People outside lack trust in Indian companies and banking requires immense trust from customers.
6. Plenty work here :
Given that we have 1.2 billion people, majority of whom are still unbanked and a large requirement of capital for infrastructure needs, it makes little sense to go overseas.
7. Not matching the Need :
Indian banks are still not meeting the Basel-III international conventions for capital requirements. This means we need more money to back existing loans.
However Indian Banks are still gradually making a reputation outside India, BoB has operations in 24 countries, BoI has operations in 21 countries and SBI has operations in 50+ countries.