New Market Entrants.

The higher the competition in a particular

sector, The easier it is for any new firm
to enter this sector and also change the
major determinants of the market
environment at any time.
The threat of new entrant will
depend on the following
determinants:
1) Entry ease of the foreign bank.


2) Geographical factors affecting foreign



banks in india.


3) Incumbent resistance.


4) New entrant strategy.



5) Distribution channel.

Entry Ease of foreign banks.
• After the liberalization and globalization process
that started in Year 1991, the banking industry
in India has seen many foreign banks coming to
India.
q Below are some of the banks currently operating
in India:
1. Citi Bank. 6. HSBC Bank.
2. Standard Chartered Bank 7. Barclays Bank.
3. ABN AMRO Bank. 8. Royal Bank of
Scotland.
4. BNP Paribas. 9.Bank Of Tokyo.
5. Bank of America.

And many others…..

The below condition makes foreign
banks easy to enter in India:
• For any foreign banks to setup their business in
india, the minimum start up capital required is
Rs 3 billion.
• Favourable Economic and political relations
between India and the country of incorporation
of the foreign bank.
• Financial soundness of the foreign bank.
• Ownership pattern of the foreign bank.
• Good International and home country ranking of
the foreign bank.
• Acceptable Rating of the foreign bank by
international rating agencies.
• International presence of the foreign bank.
 Incumbent resistance
•
• The Committee on Financial Sector Assessment
(CFSA) maintained that the foreign banks
shareholding in the subsidiaries should not
exceed more than 74% along with the rules and
regulation applicable to private banks.
• Indian policymakers have decided to adopt a quid
pro quo stance in respect of permitting foreign
banks’ easy entry into the country.
• Foreign banks today continue to be hampered by
legacy issue of restricted branch presence in
the country
 Route to market.
qWhy Foreign Banks are entering
India.
• According to the RBI,
• The bank credit is growing at 30% per annum
and retail credit is expected to grow to Rs
575,000 crore by 2010.
• Presently, total number of banking branches
and ATMs in India is about 75,000 and 35,000
respectively.
• On the other hand, the number of banking
branches is still meagre for our population as
more than 16,000 people are dependent on a
single branch.
• While 60% of our population has access to
banks, only 15% out of this has loan accounts
 Expansion of Foreign banks.

• Expansion of retail banking has a lot

of potential as retail assets are just
22% of the total banking assets and
contribution of retail loans to GDP
stands merely at 6% in India vis-à-
vis 15% in China and 24% in
Thailand.

•
 Citi banks expansion.
• Citibank has increased its branch
network from 26 to 31 in June this
year, in it operation spread across
21 cities.
• If they are to have six to seven per
cent market share, they will need a
large distribution network of 125-
200 branches across 75 cities.
 HSBC Banks Expansion.
• HSBC India is planning to expand the
scope of its factoring services in
tier-II cities across the country, with
a focus on small and medium
enterprises.
•
• It’s current focus is on mid-market
segment, which has potential for
big volumes,
 Standard chartered bank

• Hiring 2,000 people by the end of

this calendar year.
•
• Standard Chartered Bank has drawn
up plans to make a determined
entry into providing business
equipment loans to small and
medium enterprises (SMEs) in the
near future.
•
Deutsche Banks Expansion.
• Deutsche Postbank Home Finance Ltd is
expanding its reach in the Indian
market and has set itself the target of
disbursing housing loans of Rs 1,900
crore during the current financial
year,
• The company had set up 25 branches in
the country,
• Deutsche Bank India has launched two
Web-enabled wealth management
tools `WealthPro' and `InvestPro' to
cater to the needs of the retail
banking clients and will help them to
manage and plan their wealth,