Punjab National Bank intends to tap the Punjabi diaspora market in Canada by setting up a subsidiary at Vancouver. The bank would have to infuse about Rs 100 crore into the subsidiary. It has got clearance from the Reserve Bank of India but is yet to get a nod from the foreign regulator.

Addressing a press conference Mr K.V. Kamath, Chairman and Managing Director, PNB, said that the bank would aim to profit from the large inflow of remittance from Canada to India which PNB would tap.

Punjab National Bank International is a wholly owned UK subsidiary of PNB, which has six branches in the UK.

The bank intends to convert its Norway representative office into a branch and set up a representative office in Australia. The bank has a joint venture presence in Bhutan and Nepal. PNB is the only Indian bank to be present in Kazakhstan where it holds 63.6 per cent stake in JSC Dana Bank.

In rising interest rate regime, there would be shift of deposits from savings account to term deposits which will impact the net interest margin (NIM) of the (any) bank, said Mr Kamath. NIM, the difference between interest paid and earned, is a measure of profitability. NIM was at 3.91 per cent as on March 31, 2011, highest in the banking industry.

He said the guidance for NIMs for the first quarter of the current financial year was at 3.5 per cent.

PNB will select an existing life insurance company in which it will pick up a 26 per cent stake. A bidding process is on, and a shortlist has been arrived at, and the most likely candidates are Bharati Axa Life Insurance, Aviva and Metlife.

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