Bank Muscat tie-up to boost Centurion's NRI business

The tie-up with Bank Muscat will boost Centurion Bank's non-resident Indian (NRI)-related business.

Also Centurion Bank will fully leverage the existing tie-up with Bank Muscat for business opportunities, said Shailendra Bhandari, managing director of Centurion Bank.

Bank Muscat had picked up a 33 per cent stake in Centurion Bank recently.

Bhandari said with the aim of tapping the huge Indian population in Oman and surrounding Middle-East countries, Centurion Bank will use the marketing services of Bank Muscat, while the distribution and branch network of Centurion Bank in India will serve as the pad for remittances and other banking transactions for customers.

"Its a win-win situation for both the banks, we have already begun working together in the NRI business segment," said Bhandari, who was in Ahmedabad on Tuesday.

Centurion Bank has over 17,000 NRI customers, and expects this to rise substantially, with the tie-up with Bank Muscat, which is one of the leading banks of the Middle East and has a 35 per cent share of all banking operations of the Sultanate of Oman.

"With a sizable Gujarati population in the Middle-East, our bank will concentrate on Gujarat for the NRI business," Bhandari said.

Bhandari said that with the Reserve Bank of India (RBI) giving a licence to Centurion Bank to open 14 more branches, the bank will be in a position to cater to other non-metropolitan markets as well.

"We are clearly looking beyond the metropolitan cities and attempting to spread our reach wider. All 14 branches for which permission has been granted, will open in the present fiscal itself," he said.

In addition, the bank has 148 automated teller machines of its own and these will increase by 14 this fiscal.

Centurion Bank has recently received 14 new branch licences from the RBI. With this, Centurion Bank will have 75 fully-networked branches and 21 extension counters across India.

Centurion Bank will have full-service branches in place of asset marketing offices in 14 new cities namely Durgapur, Erode, Gandhidham, Jabalpur, Jamshedpur, Kolhapur, Madurai, Mangalore, Mysore, Pondicherry, Raipur, Salem, Trichy and Udaipur.

This expansion is a step towards furthering the bank's strengths in south and west India and filling some of the gaps in its network in the rest of the country. As part of the recapitalisation programme of the bank, Centurion Bank will shortly come up with a rights issue of Rs 90 crore.

Existing shareholders of the bank will be entitled to equity shares in the ratio of two equity shares of the face value of one rupee each, fully paid-up, for every five equity shares, fully paid-up, held by them.

The bank will raise Rs 90.80 crores from the proposed rights issue.

"The rights issue is expected any time now and will go a long way in implementation of the recapitalisation plan for the bank," he said.

Centurion Bank has been recapitalised by a group of international investors. The major shareholders of the bank include Bank Muscat, Keppel Corporation, Asian Development Bank and Sabre Capital Worldwide.