Punjab National Bank (PNB), the country?s second largest state-owned bank, is likely to acquire a bank in Kazakhstan this year.

?We are exploring opportunities in Kazakhstan at the moment and are keen to go for a buy-out by deploying capital worth $30-40 million, as soon as possible,?? said KC Chakrabarty, chairman and managing director, PNB on Monday.

He explained that the bank?s focus is to mainly expand outside India, across third-world developing economies like Indonesia and Kenya, through organic or inorganic routes. The move would enable the bank to serve the entire region of the Commonwealth of Independent States (CIS), which is flourishing with trade from many nuclear companies.

Chakrabarty added that buying a bank in a developed region like North America or Europe at the moment is ruled out, as capital required to do so would be too much for his bank. ?Also, we want to go to Nigeria . However, the capital requirement by the local regulator is too high,? he said.

Ranjan Dhawan, general manager (overseas expansion), PNB said, ?PNB set up its representative office in Almaty, Kazakhstan in 1998 with a plan to upgrade it into a branch or a subsidiary over a period of time. Within 2-3 months, the capital requirement set by the local regulator to open a subsidiary in Kazakhstan was hiked by almost three times to $36 million from $13 million. This development made us look for an acquisition target in Kazakhstan .

Chakrabarty added that the time is not yet ripe for consolidation in the Indian banking sector, as a vast majority of the country is still under-banked. ?It is time to expand in the country. Maybe after 4-5 years, banks in India would start consolidating.?

However, PNB on Monday said it is unlikely to lower its interest rates further in the near future. ?Given the present level of inflation and growth, I don?t see much scope, at least for PNB, to cut its rates further,? Chakrabarty, told reporters here.

PNB?s interest rates are at least 1-2.25% lower than those of other banks, especially private sector banks, he said. On credit growth, Chakrabarty said PNB expects a credit growth of 20-22% in FY 10. When asked about rising non-performing assets, Chakrabarty said the bank has the ability to withstand the challenge arising from NPAs.