The Hindu Business Line : Oriental Bank eyeing foray into Africa, West Asia

New Delhi, Oct. 8 Oriental Bank of Commerce (OBC) is eyeing a toehold in West Asia, Africa and the Asia-Pacific region. For a bank that has been focused on the domestic market for business growth, an effort to explore entry into these markets is by itself a change of tack. The OBC’s Executive Director, Mr Allen C.A. Pereira, spoke to Business Line on the bank’s business plans for the coming months.

OBC’s business has crossed Rs 1,10,000 crore. Any plans to raise more capital to fund business growth?

We don’t need further capital this year. Our capital adequacy is about 13.85 per cent as on end-June. But we have kept our options open. If pricing is good, we may go in for perpetual bonds or upper tier-II capital.

What about branch expansion?

We have sought licences for 80 more branches from the Reserve Bank of India (RBI). As of now, OBC has 1,295 branches and 86 extension counters.

Any plans to add more ATMs?

We have 704 ATMs of which 236 are offsite. The bank is not very aggressive in setting up more ATMs as we are already part of the MITR network arrangement. But we definitely have plans to expand the coverage of ATM debit cards. Any plans to set up branches or subsidiaries in markets abroad?

OBC is exploring the possibility of entry into Africa, West Asia and Asia-Pacific. We are going to do the required due diligence. It would be done within the bank and no outside consultant would be appointed. Our entry may be through representative office or branches. We have to factor in the capital requirements in these markets before arriving at a decision.

What are the main reasons for looking at these markets? There are a number of non-resident Indians and persons of Indian origin in these countries. We could get more customers. There are also a number of existing customers of OBC who have business presence abroad and undertake export-import transactions. There is scope for trade finance if we have presence abroad.

Has the board of OBC approved the entry into these markets?

The board has given in-principle nod and we have to now do the due diligence. This will take some time.

What is your outlook on interest rates?

At the moment, inflation seems to be under control. It’s pre-mature to say that interest rates will soften. They could over a period of time if there is no change in cost factors.

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