HSBC, Citibank, ING. The names may be familiar, but that is where it ends. Banking in India is perhaps the biggest difference that will be noticed by offshore investors and foreign locally – owned entities.
It starts with the ‘Terms of Business’ which are significantly more conservative and restrictive than one finds in most banks in the US or Europe. But it is the issue of bank to bank payments to India that perhaps causes the greatest strife.
Where a SWIFT arrangement exists, funds can be transferred by an offshore bank to the beneficiary account in an Indian bank within 2 – 3 days. That's standard. Where no such arrangement exists however (ING Vysaya Bank for example, does not have a SWIFT arrangement for $NZ’s), the transfer can take a very long-time. This is down in part to the fact that the process in India takes on a manual role when the cleared funds hit the receiving bank in India.
On its website, Westpac, state that transfers to India can take between 3 days – 3 weeks! This clearly has issues for both cash flow and fund management. It also poses a bigger question.
Why?
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