BoI, BoB await RBI clearance to set up JV arm in Tanzania

Atmadip Ray

Mumbai, Nov 5: Bank of India (BoI) and Bank of Baroda (BoB) have decided to float a joint venture subsidiary in Tanzania and currently awaiting for the Reserve Bank of India (RBI) approval for the same.
The joint venture will be 50:50 in nature and will operate as a full-fledged retail banking subsidiary, sources told The Financial Express.

The banks need to invest 20 billion Tanzania shilling towards the minimum capital requirement for setting up the banking subsidiary in Tanzania. As on November 5, the exchange rate of Tanzania Shilling against the rupee stood at ,1887.87.

Therefore, the initial capital requirement comes out to be at Rs 1.06 crore. The exchange rate against the US dollar stood at 90,582. Tanzania Shilling has been depreciating in a regular fashion, making it hard to see the actual initial requirement, sources in the banks noted. Both BoI and BoB are on the look out for opportunities to expand their overseas operations.

Recently, BoI has got the RBI nod for setting up representative offices in China and Vietnam.

BoB has a fairly good presence in African countries with three subsidiaries in Bostwana, Kenya nad Uganda; and a joint-venture in Zambia. It has also a branch in Durban (South Africa).

“The proposed joint venture is to increase the presence of our bank in Africa”, a senior official in BoB said adding that the bank was eager to set up a subsidiary there (Tanzania) in any form, either as a joint venture company or as a single entity. BoB has a total 38 foreign branches, six foreign subsidiaries and one joint venture spreading across 16 countries.