The Hindu Business Line : BoI close to buying East Asian bank

The Chairman and Managing Director, Mr M. Balachandran, said here on Friday that he hoped to make an announcement in this regard within the next one month. He, however, declined to go into the details of the proposed acquisition.

The bank, which has 24 branches and offices in 14 countries, is also planning to open a branch in Doha, Qatar, which will be its first foray into West Asia. It has obtained the permission of the Reserve Bank for the purpose and is awaiting the clearance from the authorities in Qatar.

Also in the pipeline is a proposal to open an office at Dubai International Financial Centre, Mr Balachandran said.

Hybrid bonds issue

The bank is set to raise capital to the tune of Rs 1,500 crore during the current year through issue of hybrid bonds. It has sought the permission of RBI to issue the bonds overseas and if it does not come through, the issue will be made within the country. This will take its capital adequacy ratio well beyond 11 per cent, he said.

The bank, which is in its centenary year, has targeted to increase the total business to Rs 2,00,000 crore in the current year from the level of Rs 1,60,600 crore recorded in the previous year. It also expects to bring down the net NPA to near zero by March 2007.

The business plans for the centenary year also include increasing agricultural credit and credit to small and medium enterprises by 31 per cent and 25 per cent, respectively; adoption of 101 villages across the country for development as model villages; issue of one lakh kisan credit cards; and raising the share of savings and current deposits in the total deposits to reduce cost of deposits and improve net interest margin.

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