Bank of India (BoI) has earmarked as much as Rs 600 crore in a bid to penetrate over 14 foreign locations in the current financial year. The allocated funds would enable BoI to meet the regulatory requirements in respective countries to open new branches or float subsidiary companies.
A senior executive of the bank?s international division, on the condition of anonymity, said, ?Last month, our representation had a meeting with top officials of the apex regulator in the US to discuss the bank?s expansion plan there. Contrary to our expectations, the officials? response was very positive as they invited us to expand in locations like California and New Jersey. We have asked US authorities to update us on capital requirements.? BoI currently operates branches in New York and San Francisco in the US.
The executive said that BoI has got an approval from the Reserve Bank of India (RBI) to float a subsidiary in Canada. The bank is expected to deploy around $31 million to open branches in cities like Toronto and Vancouver in the current fiscal. BA Prabhakar, executive director, BoI, said the bank is expected to deploy around $20 million to open its first branch in the city of Auckland by March 2010.
New Zealand has an excellent credit information system and the banking industry has less than 1% non-performing assets currently and the local banks operate at margins as high as 4-6%.
Moreover, the Indian population in New Zealand, currently estimated at around 1,50,000, has grown over 70% in the last five years. Plans are afoot to upgrade the bank?s representative offices in Dubai and South Africa into full-fledged branches by December 2009, investing an additional $15 million and $25 million, respectively.
The bank is also scouting for a possibility to open a branch or a subsidiary in Sri Lanka in the current fiscal. Simultaneously, the upgradation of a BoI branch into a full-fledged branch in Beijing is expected to cost $24 million.
On the other hand, the proposed branch in African island nation of Madagascar in the current fiscal would entail an investment of $2 million. By March 2010, BoI is expected to open branches in African countries like Malawi, Botswana, Angola, Rwanda and Uganda. The bank currently operates four branches in Kenya. ?Also, we are not averse to opt for an inorganic growth in a bid to encash on the Africa growth story in future,? the executive said. BoI has also got approval from the RBI to open a representative office in Cairo.
?Our intention is to convert the proposed Cairo operations into a full-fledged branch at the earliest possible,? the executive said. As on March 31, 2009, net profit, networth and global business of BoI stood at Rs 3,007 crore, Rs 11,000 crore and Rs 3,00,000 crore, respectively.
The bank?s reserves, excluding revaluation reserves, as on March 31, 2009, stood at Rs 10,618 crore. BoI currently operates 28 overseas offices across 15 foreign countries. The bank?s international operations generated revenues worth Rs 2,142 crore in the last financial year.