The Hindu Business Line : IOB plans major expansion overseas — To set up presence in China, Malaysia, Canada, UAE

Mr S. C. Gupta (right), CMD, Indian Overseas Bank, handing over the interim dividend cheque to the Banking Secretary, Mr N. S. Sisodia, in the Capital on Friday. - - Ramesh Sharma

New Delhi , Feb. 13

INDIAN Overseas Bank (IOB) is on a new flight overseas. The Chennai-based bank has drawn up elaborate plans to expand its foreign presence.

It proposes to add a clutch of new branches and representative offices in several countries, besides setting up a "limited purpose" branch in Singapore.

The new initiatives would see the bank establishing a presence in China, UAE, Malaysia and Canada. At present, the bank has six foreign branches including two each in Hong Kong and Sri Lanka and one each in Singapore and South Korea.

The Chairman and Managing Director, IOB, Mr S.C. Gupta, said the bank planned to have a branch each in Malaysia and Canada, while the presence in China and UEA would be through representative offices.

In Singapore, the bank's second branch would be set up for the limited purpose of issuance of draft and is expected to cater to the Indian population wanting to remit funds to India.

"While we have got all clearances for the limited purpose branch in Singapore including regulatory clearance from RBI and Singapore authorities, the plans for the other branches and rep offices are subject to regulatory clearance," said Mr Gupta.

He was here to present a cheque of Rs 40 crore to the Government as interim dividend for 2003-04.

Mr Gupta said the focus of IOB during the first nine months of the current fiscal had been to ensure a growth in low cost deposits and increase in advances at a faster pace than the overall growth in the banking system.

"We have ensure our staff that there would be no harassment on account of fallout of their bona fide decision. The assurance has been having its effect with our staff aggressively pursuing lending activities," he said.

On the interest rate scenario, Mr Gupta said that he expected very little volatility in the coming months.

"I do not foresee much increase or decrease in the coming one year or so. What we would see is the rates moving in a range of 25 to 50 basis points on both sides," he said.

Mr Gupta supported the Finance Minister, Mr Jaswant Singh's stand as mentioned in the Interim Budget that the bank lending rates to the farm sector should decline further from the present 9 per cent.

"I fully agree with the Finance Minister. India is basically and agrarian economy and there is no reason why sector should no be allowed to avail of credit at lower rates since as the corporate sector is doing at present. In fact, the recovery position on crop loans has not been very bad for the banks," he said.