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Indian Overseas Bank (IOB) was founded in 1937 with the objective of specialising in the foreign exchange business and overseas banking. The bank had the unique distinction of commencing business on the inaugural day itself in three branches simultaneously—Karaikudi, Chennai, and the Burmese capital of Rangoon, followed by a branch in Penang, Malaysia IOB has a strong network in south India, which accounts for about two-thirds of its total network. Tamil Nadu alone boasts of 756 branches of the total 1,829 branches, besides six overseas branches as on December 2007.

On the eve of nationalisation in 1969, IOB had 195 branches in India with aggregate deposits of Rs 67.70 crore and advances to the tune of Rs 44.90 crore. In the same year, Bharat Overseas Bank Ltd was created in India with 30% equity participation from IOB to take over IOB’s branch in Bangkok. Bharat Overseas Bank was taken over by IOB at the end of 2006-07.

Net profit for the nine-month period (April-December 2007) increased by 24.73% to Rs 896.38 crore from Rs 718.67 crore for the corresponding period last year. Gross and net NPAs decreased to 1.87% and 0.36% at the end of 2007, as against 2.54% and 0.48% at the end of the 2006 fiscal. Capital Adequacy Ratio at the end of the last fiscal stood at 12.85%, while the return on average assets (annualised) stood at 1.32% as on December 2007, as against 1.43% for the corresponding period last year. IOB has plans to increase its total business to Rs 2 lakh crore by March 2009.

“We took the lead to computerise our operations in stages through in-house software development,” says chairman, SA Bhat. Social banking is another important area for IOB. IOB has sponsored two regional rural banks; namely Pandyan Grama Bank and Neelachal Gramya Bank.

Moving on, IOB plans to open a representative office in Hochi Minh City, Vietnam by the end of this year, a branch in New Zealand, and a representative office in Dubai during the course of the next financial year.