The Hindu : Business : IOB for consortium approach by Indian banks abroad

Online edition of India's National Newspaper
Thursday, Mar 23, 2006

Business

Business

IOB for consortium approach by Indian banks abroad

V. S. Sambandan

They can take advantage of Free Trade Agreement with Sri Lanka

COLOMBO: A consortium approach in overseas operations by Indian nationalised banks would favour the sector in consolidating businesses in select locations, V. Krishnaswamy, General Manager of Indian Overseas Bank, told The Hindu in Colombo on Wednesday.

Based on the bank's long experience in Sri Lanka, and its interaction with the other Indian public sector banks in Colombo — State Bank of India and Indian Bank — Mr. Krishnaswamy felt that the non-competing nature of overseas banking suited the consortium approach. However, in some more competitive centres as in the case of Hong Kong, this approach would be more difficult. The advantages of the consortium approach would be more relevant in the context of growing bilateral trade between India and Sri Lanka with the Free Trade Agreement (FTA).

Mr. Krishnaswamy was in Colombo recently accompanying the Chairman and Managing Director, T. S. Narayanasami, on an official visit.

The advent of the FTA, Mr. Krishnaswamy said, offered Indian banks scope for enlarging business in Sri Lanka. IOB has five fully operational branches outside India - two in Hong Kong and one each in Singapore, Seoul and Colombo. The IOB's Sri Lanka branch is its second oldest overseas operation after Singapore. It has also opened representative offices in China and Malaysia and plans to open one in the UAE.

One of IOB's emerging areas of sharp focus, Mr. Krishnaswamy said, was in the inward remittances sector - both into Sri Lanka and into India. The growing market could be tapped with strategic alliances, he said. Though IOB had a branch in southern Sri Lanka in the past, at present it is focussing on consolidation of its existing operation. The bank, with a six decade long presence in the island nation, was hit twice by the decades-long ethnic conflict - first in the 1983 anti-Tamil pogrom and later by the Central Bank bombing by the LTTE with its property damaged in both incidents. It has recovered and stabilised since then.

Its future plans include stepping up revenues from fee-based businesses such as mutual funds, A. Ramaswamy, IOB's Country Head, said.

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