BoI plans China, US arms by 2006

Bank of India (BoI) plans to establish subsidiaries in Shenzen, China and San Francisco, US "" a Nigerian unit is likely too "" by March 2006.

The bank is also examining entry into various other markets such as Bangladesh, west African countries and Middle East.

BoI plans to convert its representative office in Shenzen into a subsidiary, which will require a minimum capital of $20 million. The subsidiary will focus on corporate lending and export-import related services riding on the increasing Sino-Indian businesses flourishing there, said M Balachandran, executive director, Bank of India.

The subsidiary is aimed to complement the business generated by the bank's two branches already present in Hong Kong.

Bank of Baroda also recently converted its set up in Hong Kong into a branch to capitalise on the Indian business booming in China.

The growing Sino-Indian relations has seen a growing number of Indian companies establishing their presence in China, with trade volume in 2003-04 having risen by 54 per cent to $7.597 billion.

Bank of India, which generates 16 per cent of its profits from its overseas operations, is planning to convert its agency in San Francisco into a subsidiary.

As an agency there are limitations in collecting deposits and in offering other retail banking services.

The bank has been in the tightly regulated US market for the last 25 years with a subsidiary in New York and an agency in San Francisco. The subsidiary in New York has total assets of close to $1 billion.

The bank is considering the option of reopening its set up in Nigeria which it closed down 5-6 years ago due to political tensions, said Balachandran.

Aiming to increase its global footprint the bank is also looking at West African countries, Bangladesh and the Middle East.