INDIA
With a population of 1,45 billion and a forecasted GDP of $4,187bn in 2025, India is the world’s largest democracy. It is a large, increasingly open economy with rapid growth underpinned by services, manufacturing, and digital expansion. Its NIIP remained negative at around –10.5 percent of GDP in 2023, improving somewhat to –9.6 percent by end 2024 thanks to valuation changes and nominal growth.
Public debt is elevated by emerging‑market standards, with preliminary estimates of 83–84 percent of GDP in fiscal 2024/25, although reform scenarios posit a gradual reduction below 74 percent in the medium term. Government deficits remain in the 5–6 percent of GDP range, with aims to narrow them over time.
Despite fiscal pressures, India retains credibility through gradual fiscal consolidation and structural reform; interest‑rate risks are partially contained by domestic debt composition and strong domestic savings.
Growth remains robust: 8.2 percent in 2023/24, easing to 6 percent in early 2024/25, with the IMF projecting continued expansion supported by consumption and investment. While this reflects moderation, Indian growth remains among the strongest in major economies.
Challenges include managing inflation, reinvigorating fiscal consolidation, increasing capital expenditure efficiency, coping with demographic pressures, and advancing productivity-enhancing reforms.
India’s growth outlook remains strong, with real GDP expected to grow at 6.5–7% annually through 2026, making it one of the fastest-growing major economies.
Summary
BNP Paribas has been present in India since 1860, the second longest-established foreign bank in the country. The Bank has 8 business centres in Mumbai, Delhi, Bangalore, Hyderabad, Kolkata, Chennai, Pune and Ahmedabad, and 14,000 employees. It is one of the few international banks catering for the domestic, regional and global requirements of corporate customers.
BNP Paribas is a member of the local clearing house and offers comprehensive payment, collection and trade finance solutions. This includes partnering with leading local vendors for providing cash in transit and card collection solutions. The bank offers a variety of solutions to address the specific functional requirements in India, including online tax payments, remote cheque printing of cheques, a 'BankSmart' application for mobile phone authorisation, an online payment gateway, pre-signed blank cheques and post-dated cheque collections. These services enable customers to optimise efficiency and control whilst observing local payment practices.
Currency
- Indian rupee (INR).
| 2016 | 2017 | 2018 | 2019 | 2020 | |
| Exchange rate: INR per USD | 67.195 | 65.122 | 68.39 | 70.42 | 74.10 |
Source: IMF, International Financial Statistics, June 2021.
- The Indian central bank is the Reserve Bank of India (www.rbi.org.in).
Bank supervision
- Most Indian banks are supervised by the RBI’s Department of Supervision.
- Rural and most cooperative banks are supervised by the National Bank for Agriculture and Rural Development (NABARB – www.nabard.org).
Bank accounts
- A company is resident in India in any tax year if it has registered under the Indian Companies Act 1956, other specified Acts/laws or if, during the relevant tax year, the control and management of its affairs were situated wholly in India.
- A non-resident company is one that is at least 60 percent owned by a non-resident or a Non-Resident Indian (NRI), i.e., someone with Indian citizenship who resides outside India.
| Within INDIA | Outside INDIA | |
| Local Currency | Permitted without restriction, not convertible |
Not permitted |
| Foreign Currency | Permitted with restrictions, convertible |
Permitted, with restrictions |
| Within INDIA | Outside INDIA | |
| Local Currency | Permitted with restrictions, convertible for some entities |
Not permitted |
| Foreign Currency | Permitted with restrictions, convertible |
Not applicable |
- Lifting fees may be applied on payments between resident and non-resident bank accounts.
BNP Paribas Cash Management Capabilities
| Cash collections | |
| Cheque collections | |
| Direct debit collections | |
| Domestic incoming transfers | |
| Virtual IBAN | |
| Virtual accounts | |
| International incoming transfers | |
| Card acquiring |
| Cash withdrawals | |
| Cheque payments | |
| Direct debit payments | |
| Domestic outgoing transfers | |
| Commercial cards | |
| Virtual cards | |
| International outgoing transfers | |
| SWIFT gpi | |
| Real-time international payments through BNP Paribas’ network | |
| Card issuing |
| Local e-Banking | |
| Global e-Banking - Connexis | |
| SWIFT/ host to host |
Payments & collections
The rapid adoption of digital payments in India – they accounted for 97% of the total non-cash retail payments in 2019-20 – has been encouraged by the central bank and the government. The RBI has established a Payments Infrastructure Development Fund to promote digital payment adoption across the country and removed charges for making online transactions via NEFT. It has also mandated that companies with an annual turnover of more than INR 500 million need to offer customers low-cost digital payment options, including the UPI QR Code and Aadhaar Pay. However, cash remains the dominant payment method for medium- and small-value transactions in India accounting for as much as 96% of total payment transaction volume in 2019-20
Electronic banking services are available from most banks, with services predominantly used by larger companies. There is no national electronic banking standard in India, so companies use banks’ proprietary services.
Online and mobile banking services are provided by the country’s leading commercial banks. As of March 2021, there were 566 banks permitted to provide mobile banking services. Digital systems include:
- The Bharat Interface for Money (BHIM) is a mobile app based on the UPI. It enables transfers between accounts directly through banks. Transactions are near real-time and can be conducted 24/7. Users can also check balances and use mobile numbers to send payments. There are 180 participant banks.
- The National Payments Corporation of India operates the Interbank Mobile Payments Service (IMPS), a real-time electronic funds transfer system. There are 629 participant banks in IMPS, with a customer base of over 22 million mobile phone subscribers.
- The Unified Payments Interface (UPI) enables users to make, receive and schedule online payments via smartphone. Payments are transferred directly between any two banks. There are 216 members of UPI.
| RTGS | Type |
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| System holidays |
* The date shown may vary by plus or minus one day. These dates are derived by converting from a non-Gregorian calendar (e.g., Muslim or Hindu) to the Gregorian calendar. Some of these dates cannot be determined in advance with absolute accuracy, even by the governing authorities. In the case of Muslim dates in particular, the feast days are determined by the sighting of a new/full moon. | |
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| CTS | Type |
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| Transaction types processed |
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| Clearing cycle details (e.g. cut-off times) |
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| NEFT | Type |
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- Credit transfers are used by companies to pay salaries and suppliers.
- High-value (above INR 200,000) and urgent INR-denominated credit transfers are settled in near real time via the RTGS. As of April 1, 2021, all payment transactions of INR 50 crore and above by entities processed via the RTGS or NEFT will require a Legal Entity Identifier.
- Low-value and non-urgent bulk credit transfers can be settled on a same-day or next-day basis via the ECS.
- Low-value and high-volume credit transfers can also be processed via the NACH on a same-day basis. NACH mandates have replaced all ECS mandates for all recurring payments such as credit card and utility bills.
- One-off and low-value credit transfers can also be settled via NEFT, IMPS and the UPI system.
- Cross-border transfers can be made via SWIFT and settled through correspondent banks abroad.
- In 2019, the volume of credit transfers processed totalled 18,486 million, with a value of INR 284 trillion, a 56% and 8.8% increase respectively on 2018.
- Direct debits are used for regular payments, such as utility bills.
- Direct debits are settled on a next-day basis via the ECS or NACH system (NACH mandates have replaced ECS mandates for all regular bill payments).
- In 2019, 826 million direct debits and debit transfers were processed, with a value of INR 8 trillion, a 54.7% and 33.3% increase on 2018.
- The cheque is a popular cashless payment instrument, used by both consumers and companies.
- From January 1, 2021 the positive pay system’ for cheques came into effect. Under the positive pay system, key details will require re-confirmation for payments above INR 50,000. It is hoped the new system will reduce cheque banking fraud.
- Cheques are truncated into electronic items before being processed via the CTS. In March 2021, the use of the check truncation system (CTS) was extended across all bank branches throughout the country.
- Settlement is on a same-day basis for local cheques and a next-day basis for intercity cheques.
- Non-local cheques in areas subject to speed clearing are cleared within two days.
- Non-local cheques in areas that are not subject to speed clearing can take up to three weeks to clear.
- Banks use courier services for cheque collection in areas where they do not have branch coverage. These cheques are cleared at local clearing houses through correspondent or partner banks.
- Card payments are increasingly popular, especially for retail transactions.
- As of January 2021, there were 888 million debit and 61.1 million credit cards.
- RuPay is India’s national domestic payment card operator. There are over 600 million RuPay cards in circulation.
- Visa and MasterCard-branded payment cards are the most widely issued.
- Most debit and credit card payments are processed by the National Financial Switch (NFS) on a same-day or next-day basis.
- Visa card payments are processed via the Visa switch for settlement through Bank of America. MasterCard payments are processed via the MasterCard switch before being settled by the Bank of India. Visa and MasterCard payments are cleared on a next-day basis.
- The RBI is currently implementing a scheme for all cards to carry EMV chips.
- The number of card payment transactions carried out through credit cards and debit cards increased by 23.5% and 16.1% respectively in 2019/20, to 2,177.3 million and 5,123.9 million. Value increased by 21.1% and 35.6% to INR 7 trillion and INR 8.0 trillion respectively.
- There were 210,000 ATMs in India at the end of January 2021.
- There were six million POS terminals in India at the end of January 2021.
- Most card payments are settled on a same-day basis via the NFS network. A total of 112 banks participate in the NFS ATM network. A further 978 banks participate as sub-members.
- The dominant electronic wallet schemes in India are pre-paid cards scheme. All prepaid payment instruments (PPI) in India are subject to a maximum value limit of INR 50,000 per month. Fifty-seven banks are permitted to issue pre-paid cards.
- There are an estimated 1,946 million PPI wallets and 175 million PPI cards in India. Mobile wallets can hold a maximum of INR 20,000.
- E-money payments are settled via their individual schemes.
- The UPI enables users to transfer money without sharing bank details. The UPI@PoS app can be used to make retail payments in-store. Paytm is the country’s largest digital wallet provider, with approximately 200 million users. There are 207 live banks on UPI.
- QR payment options are available. The Reserve Bank has advised that all payment service operators shift to the interoperable UPI QR or Bharat QR by March 31, 2022. The launch of new proprietary QR codes is prohibited.
- In January 2021, there were 2,319 million mobile payments transacted, with a value of INR 9,384 billion.
Short term investments
Interest payable on credit balances
- Interest-bearing current accounts are not available.
Demand deposits
- Demand deposits denominated in INR or major foreign currencies are available with terms ranging from overnight to one year.
Time deposits
- Time deposits are available in INR or major foreign currencies with terms ranging from one week to one year. Non-residents are required to invest for a minimum of 1 one year.
Certificates of deposit
- Domestic banks issue certificates of deposit with terms ranging from one week to 12 months. Terms of three months are most common.
- Certificates of deposit can be issued paying fixed or variable interest.
- The minimum investment amount is INR 100,000.
- Companies can also issue inter-corporate deposits. Terms are typically up to six months.
Treasury (government) bills
- The RBI issues Treasury bills at weekly auctions. Terms are typically for three, six and 12 months.
- India’s government has also started to issue Cash Management Bills (CMBs), which are similar to Treasury Bills and have maturities of less than 91 days.
- Domestic commercial paper is issued by companies. Most paper is issued for three months, although terms ranging from seven days to 12 months are available.
- Commercial paper must have a published credit rating.
- The minimum investment amount is INR 500,000.
Money market funds
- Money market funds are available.
Repurchase agreements
- Repurchase agreements are only available in india for institutions approved by the RBI.
Banker's acceptances
- Banker's acceptances are not available in India.
BNP Paribas Trade Finance Capabilities
| Documentary credits | |
| Documentary collections |
| Bank guarantees | |
| Standby letters of credit |
| Receivables | |
| Payables | |
| Inventory |
| Connexis Trade | |
| Connexis Supply Chain | |
| SWIFTNet Trade for Corporates | |
| Connexis Connect | |
| Connexis Guarantee | |
| SWIFTnet Supply Chain |
- BNP Paribas Global Trade Solutions’ (GTS) team in India consists of 15 trade managers across 6 trade centres in Ahmedabad, Bangalore, Chennai, Mumbai, Pune and New Delhi, and as such is one of the largest and most well-established presences within Asia Pacific. In addition to comprehensive support, BNP Paribas GTS’ team in India supports a large volume of domestic trade activities.
International trade
- India is a member of the South Asian Association for Regional Cooperation (SAARC), which aims to abolish most trade tariffs between member states. SAARC comprises Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.
- India has 231 operational special economic zones.
- India is a signatory of the SAARC South Asia Free Trade Agreement (SAFTA).
- India has preferential access, economic co-operation and Free Trade Agreements (FTA) with about 54 individual countries. Most recently in April 2021, India’s FTA with Mauritius came into effect.
- India is in FTA talks with a number of countries and trading blocs including Bangladesh, Chile, Indonesia, the European Union, South Africa Customs Union (SACU), the Gulf Cooperation Council (GCC), Australia, New Zealand, Israel, Panama and Colombia. Trade talks with the European Union (stalled since 2013) are set to revive in 2021.
| Imports | Crude oil | Gold | Coal | Diamonds | Natural gas |
| Primary Import sources | China (15.0%) | USA (7.0%) | UAE (6.0%) | Saudi Arabia (5.0%) | |
| Exports | Petroleum products | Precious stones | Packaged medicine | Jewellery | Vehicles |
| Export markets | USA (17.0%) | UAE (9.0%) | China (5.0%) |
| 2016 | 2017 | 2018 | 2019 | 2020 | ||
| Exports | - goods USD m | 268,615 | 304,107 | 332,087 | 331,272 | 281,701 |
| - services USD m | 161,819 | 185,294 | 204,956 | 214,762 | 203,253 | |
| Imports | - goods USD m | 376,090 | 452,241 | 518,779 | 488,950 | 376,946 |
| - services USD m | 95,922 | 109,371 | 124,182 | 130,535 | 116,230 | |
| Current account as % GDP | – 0.5 | – 1.5 | – 2.4 | – 1.1 | NA | |
Source: IMF, International Financial Statistics , June 2021.