Indian Overseas Bank to expand in SL

By Shabiya Ali Ahlam

Visiting Indian Overseas Bank (IOB) Chairman/MD Dr. M. Narendra at a press briefing held last week stated that a further expansion of the bank along with possible investment plans in Sri Lanka are on the agenda for 2013.

Invited by the Central Bank Governor Ajith Nivard Cabraal for a briefing on the development of economy and the prospects of funding projects, Narendra said:

“The IOB is keen on investing in the infrastructure development of Sri Lanka as the governor requested us to consider this area of development to finance.”  Acknowledging the economic growth rate, GDP and per capita of Sri Lanka to be progressive, Narendra added that the bank would be facilitating investments by providing long term credit for proposed projects whereas it would also look to fund SMEs in the agricultural sector of Sri Lanka, recognising the immense potential of the sector. In addition to the investment plans, IOB would also be pumping $ 50 million into Government equity, however details of the specific areas of Government equity being looked was not elaborated on.

Founded in Chennai, India in 1937, IOB extended its operations to Sri Lanka in 1945 and has been successfully operating in the country ever since. The leading bank in India has over 2650 domestic branches, three extension counters and six branches overseas. Having achieved 100% networking and CBS status for all its branches, the bank also has 1433 ATMs worldwide. IOB currently has a credit portfolio of over $3434 million and deposits in excess of $1218 million, while its operating profit stands at $59 million. A total of 22% of IOB’s profit is generated through its overseas function according to the Narendra.

IOB, which ranks third in the fastest growing bank category in India, would be extending its branches focusing mainly on the southern region of Sri Lanka. IOB country head D. Palanisamy told the Daily FT that Hambantota has been selected to widen its network as it is noted to be undergoing a massive transformation. While the expansion decisions has already been made, the bank is yet to get clearance from the Indian regulators as well as the country’s Central Bank and once the go signal is received, necessary approval would be obtained from the Central Bank of Sri Lanka as well. The bank would also reopen a Foreign Currency Banking Unit in Colombo this year after operations were suspended in the early 1980’s.

Aiming to establish 3000 branches worldwide by March 2013, IOB will be recruiting six local senior officials in Sri Lanka. Highlighting the IOB function in Sri Lanka consisting of 25 local staff working at the bank’s two branches located on Main Street and Bambalapitiya, Narendra commended their professionalism saying the performance of the local staff is exceptional. “Their level of knowledge and commitment is simply great, we are grateful for having such a talented workforce,” Narendra said.

Narendra who was on a short visit to Sri Lanka had also met with other key officials of the Central Bank in addition to the governor and expressed that his stay in Sri Lanka has been very productive.