HSBC survey said economic growth in emerging market economies slowed in the July-September quarter on poor performance by the manufacturing sector, but India expanded more than China.

The HSBC Emerging Markets Index EMI slipped to 52.1 in the third quarter this year, from 53.2 in the April-June period. A relatively better performance from the services sector was offset by the poor performance of the manufacturing sector, as global demand softened.

However, among the big-four emerging markets, expansion in India and Russia was better than Brazil and China, HSBC said.

HSBC's chief economist Murat Ulgen said emerging economies are being impacted by the misery of the developed world as the deteriorating global trade cycle, weaker external demand and falling new export orders hit manufacturing output and the services outlook.

The Finance Ministry has asked public sector banks not to accept bulk deposits beyond 15 per cent of total deposits to improve asset-liability management. This was informed by the Secretary Department of Banking and Financial Services D K Mittal on the sidelines of a meeting of the Federation of Indian Export Organisations in New Delhi today. Mr Mittal said the Finance Ministry has recently issued a circular to the banks in this regard.

Mr Mittal called upon exporters to desist from devaluing the domestic currency by trading in foreign currency, which creates problems for the government. He said exporters should focus on exporting goods and services rather than worrying about the fluctuations in the Rupee. On the export credit issue, the Secretary said, the government is committed to promoting exports. He said the issues raised by exporters require consultations with the RBI and the Commerce Ministry.

Commenting on the issue of HSBC bank’s Indian staff coming under the scanner of a US probe into money laundering, Mr Mittal said the RBI is looking into it. He said the finance ministry would assist the central bank with the required inputs

A US Senate investigation has found that poor controls at the global bank HSBC allowed Mexican drug traffickers and other criminals to launder billions of dollars into the United States. A report released before a Senate hearing on the matter today said the London-based bank also did business with firms linked to terrorism and bypassed US financial sanctions against states such as Iran. It said HSBC executives and U.S. regulators routinely ignored warning signs and failed to stop illegal behavior between 2002 and 2010, effectively giving criminals and terrorists a portal into the U.S. financial system. HSBC, Europe's largest bank, has released a statement saying its executives will apologize at the Washington hearing, during which lawmakers will question bank officials and U.S. regulators.