IndusInd Bank likely to opt for inorganic growth

Written by Hemang Palan | Mumbai, May 30 | Updated: May 31 2008, 06:20am hrs
IndusInd Bank which is in the process of revamping its operation after Romesh Sobti,who was heading Indian operations of ABN Amro bank joined the Hinduja controlled bank may acquire a bank in India in a bid to strengthen its business across the country in future.

In an exclusive interview to FE, Romesh Sobti, chairman and MD, IndusInd Bank said, Currently, we are following a plan that mainly focuses on an organic growth for the next three years. Thereafter, we will certainly look at various opportunities as a suitor. We will hopefully have the management depth and also the acquisition currency to be able to act as a suitor in the market in future.

On whether post 2009, IndusInd will be a part of the consolidation process, Sobti admitted that his bank is also drawing the attention of many potential investors at present. However, he did not divulge the names of potential investors that may have approached the bank.

He added, If an investor approaches us with a compelling proposition that not only fetch us the funds but also brings an array of added advantages like product capabilities or special skills that we do not posses at present, we might liquidate up to 5% stake of our bank.

Sobti said that RBI is most likely to allow higher permissible investment limit of 5% in Indian banks when revised guidelines are framed in 2009.

However, I do not expect the big bang to happen a year down the line, he said. Sobti opined that the regulator may allow a calibrated entry to the foreign players in the Indian banking sector after 2009.

He said many foreign banks have not been affected at all or as badly as US based banks due to the sub-prime crises. The pockets which remain unaffected by the sub-prime crises include the banks in countries like Spain, Canada, Australia, Italy etc.