Centurion links up with BankMuscat to offer foreign currency products

Centurion Bank plans to piggy-back on Bank Muscat's offshore banking centre and offer foreign currency products for Indian residents. This will make it the second private sector bank, after ICICI Bank, to introduce forex deposit products in the country. The government opened the doors for resident Indians to invest up to $25,000 overseas. To date, five banks have introduced their products to cater to the global Indian.

BankMuscat is the single largest shareholder in Centurion Bank, with a 33.04 per cent stake. This will, however, fall to 26 per cent after Centurion Bank's Rs 90.8-crore rights issue in keeping with the Government of Oman's directive that BankMuscat can only have a fully-owned subsidiary or a minority shareholding in the Indian private sector bank.

Centurion Bank's plans to offer forex deposit products is part of its strategy to venture into wealth management services as it expands its retail coverage.

In addition to forex deposits, Centurion Bank also proposes to vend insurance and mutual fund products.

The bank's managing director Shailendra Bhandari said: "Bank Muscat has a strong presence in Oman (with about 35 per cent market share) and proposes to expand its presence in the Middle East. We plan to cash in on this and offer our products and services through their branches, as it is better than opening our own branches there."

Centurion Bank has a strong presence in south India, with large deposits from non-resident Indians without any tie up with a global bank.

The bank proposes to strengthen its presence in the south where there is a large NRI-related population. It has six branches and six extension counters in Kerala. With BankMuscat's shareholding in the bank, Centurion Bank hopes to increase its NRI customer base.

Meanwhile, even as Bank Muscat had tied up with Birla Sun Life Insurance Company to act as its corporate agent, Centurion Bank is in talks with a number of insurance companies for a corporate agency tie up.

A final decision is yet to be taken. However, Bhandari said it will depend upon the mix of insurance products and how they best suit the bank's customers.

As BankMuscat will reduce its holding in Centurion Bank, Sabre Capital will increase its stake to 20 per cent. Keppel has been increasing its holding in the private sector bank and holds about 14.5 per cent stake now. Centurion Bank has already reached the trigger limit of foreign holding at 72 per cent, leaving no further room for foreign investment.