According to officials close to the development, PNB preferred Kazakhstan for the overseas joint venture in place of Malaysia.
In the proposed Malaysian joint venture, Bank of Baroda will have 40 per cent stake while Andhra Bank and Indian Overseas Bank will own 30 per cent each. S A Bhat, chairman and managing director, Indian Overseas Bank, confirmed the development.
Indian Overseas Bank, which was looking at strengthening its footprint in Malaysia, grabbed the opportunity after PNB opted out. All the three banks have a presence in Malaysia through representative offices or branches.
The shares of Indian Overseas Bank ended at Rs 73 on National Stock Exchange, down 4.51 per cent from Wednesday. It makes sense for Indian banks to take the joint venture route in Malaysia because of the high capital requirements, bankers said. The initial capital required to start banking operations in Malaysia is about $70 million.
Indian Overseas Bank, which is already present in Malaysia through a representative office since 2006, is looking to beef up its business in the Far-Eastern country.
Apart from Bank of Baroda, Indian Overseas Bank had also written to UCO Bank to join the Malaysian joint venture. UCO Bank is already present in that country. Bank of Baroda, the lead bank in the joint venture, has applied to Reserve Bank of India for approval to start operations in Malaysia.
