BoI to beef up foreign business

To invest $100 million for overseas expansion

Bank of India (BoI), one of the largest public sector banks in the country, is expanding its domestic and overseas operations, besides restructuring its organisational set-up.

The 100-year-old bank is also planning to introduce online trading facility for its customers and portfolio management services to non-resident Indians.

According to chairman and managing director M Balachandran, the bank is on an overseas expansion involving an investment of $100 million.

Besides upgradation of its branches in China, Vietnam and Jakarta, the bank is planning to open one more branch in Beijing and set up offices in Doha, Tanzania and Antwerp in Belgium.

On the domestic front, the bank would be adding 45 more branches to its existing 2,600 branches. It would also increase the number of rural kiosks from 50 to 150 and the mobile ATMs from the existing one in Mumbai to about 15 by the end of this fiscal. For setting up mobile clinics, the bank was mapping rural areas to examine the possibility of online connectivity.

Stating that consolidation was a must in the Indian banking industry, Balachandran did not rule out the possibility of augmenting growth through inorganic route of mergers and acquisitions. "We are open for this, though we have not got any specific proposal so far. We are looking around the market in this regard," he told newspersons here on Wednesday.

The bank currently has a capital adequacy ratio of 11.4 per cent, of which tier-I capital is 6.97 per cent and the remaining is tier-II capital. The Union government has 69 per cent and the public has 31 per cent share in the equity of the bank.

For augmenting the capital adequacy ratio to meet the Basel-II norms, Balachandran said the bank has various options. It was also looking at the possibility of the government introducing tier-III capital, a new instrument that could qualify for inclusion in the capital structure of the bank.

As part of its efforts to restructure the organisation, BoI is establishing strategic business units to cater to the needs of different sectors of the economy.

The bank would also be increasing the number of its marketing personnel from the existing 500 to 1,500 by the end of this fiscal and to 2,500 later. Balachandran said the bank's offices in Japan, New York, UK and the proposed one in Belgium would facilitate diamond trade.

Among the Indian banks, BoI has the second largest exposure to diamond trade. Incidentally, the bank's overseas operations account for 20 per cent of its total business of Rs 1,45,000 crore. Last year, BoI has given a 10-year contract to Hewlett-Packard for integration of its systems at an estimated Rs 600 crore.

Today, 900 of the bank's branches in 23 cities across the country are interconnected. "Eighty per cent of our customers will have real-time banking facility," Balachandran added.