The Hindu Business Line : IOB gets back its Bangkok branch

RETURN OF THE PRODIGAL: The Chairman and Managing Director of IOB, Mr T S Narayanasami, (third from left), and Dr Tarisa Watanagase, Governor, Bank of Thailand, at the inaugural function of the Bangkok branch.

Chennai March 28

Indian Overseas Bank got back its Bangkok branch on Wednesday into its fold, 34 years after it set up the branch and lost it to a newly set up entity called Bharat Overseas Bank Ltd.

Back in 1973, soon after IOB was nationalised, Thai authorities objected to the Bangkok branch being a part of a public sector undertaking. Accordingly, the branch was taken over by a special purpose vehicle — Bharat Overseas Bank Ltd — in which seven banks had stakes.

Last year, a reversal of the event happened. IOB bought out the six other partners and is in the process of merging BhOBL with itself. On Wednesday, the Thai authorities have agreed to let the Bangkok branch be a part of the public sector IOB.

In the meantime, BhOBL has flourished and grown into a strong small-sized bank. Today, it has deposits of Rs 3,244 crore and an advance book of Rs 2,053 crore. It has 103 branches across India.

The merger of BhOBL with IOB will offer the latter opportunities for rationalisation because at least in 76 locations both banks have branches.

"With strong financials the overall exposure of IOB in Thailand can be scaled up significantly, duly adhering to the regulations of the Bank of Thailand. IOB will play a constructive role in the financial sector of the Thai economy," Mr Narayanasami told Business Line on Wednesday.

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