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Indian banks’ liabilities to US declined in 2012, but the share of the UAE in the country’s international liabilities rose by over 4 percentage points. Overall the international liabilities of banks located in India grew by 25.5 per cent to Rs 6,56,489 crore in the year to December 2012, the latest RBI data reveals.
On the other hand, the banks international assets declined by 1.4 per cent to 3,20,356 crore. The growth in international liabilities was mainly on account of NRE deposits and foreign currency borrowings. On the other hand, the decline in international assets was due to a substantial decline in Nostro balances, that is, accounts held in a foreign country by domestic banks that are denominated in the currency of that country.
Nostro balances fell by 23.1 per cent during the year to December 2012, pushing down Indian banks’ international assets despite a moderate increase of around 8 per cent in loans to non-residents and outstanding exports bills.
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