The Board of Directors of Bank of Baroda (BoB) has approved the divestment of up to 49 per cent of the bank’s shareholding in its wholly-owned subsidiary BoB Financial Solutions Ltd (BFSL).

The board also approved issuance of an advertisement inviting Expressions of Interest (EoI) from suitable investors/ strategic partners to acquire BoB’s shareholding in BFSL (formerly known as BoB Cards Ltd)

The decision to divest up to 49 per cent of the bank’s 100 per cent shareholding in BFSL comes about six years after Spanish Bank BBVA (Banco Bilbao Vizcaya Argentaria) backed out of a deal to buy 51 per cent stake in BoB Cards.

The foreign bank had signed a Memorandum of Understanding with the public sector bank in December 2010 to pick up the stake in BoB’s credit card venture for €34 million (about Rs 208 crore at the then prevailing exchange rates).

BFSL is a non-deposit accepting Non-Banking Finance Company (NBFC). It was established in 1994 to cater to the needs of a rapidly growing credit card industry.

The company was the first non-banking company in India to issue credit cards. The company’s core business is credit card issuance. It also provides support to the bank by carrying out merchant acquiring operations on the bank’s behalf.

“BFSL is just among the two card companies, which actually is independent of the bank. So it is possible to get a joint venture partner,” Sanjiv Chadha, MD & CEO, Bank of Baroda, told BusinessLine.

He observed that the bank is looking at two possibilities -- a partner, including a private fund, with relevant experience in the cards space in terms of technology and international presence, or a domestic institution which has a complimentary distribution network.

“The company issued more than 5 lakh new credit cards in FY 2022, doubling the new acquisition done in FY 2021. It also joined the elite club of issuers with a base of 10 lakh or more credit cards,” per the public sector bank’s annual report.

As at March-end 2023, BFSL had total assets of Rs 1.562.45 crore. It posted a net profit of Rs 10.07 crore in FY22.