Indian Bank is set to expand its global footprint-step by step. As starters, the Chennai-headquartered bank is opening a full scale branch in Jaffna, the capital of Sri Lanka’s northern province. It may be mentioned that Indian Bank already has a branch in the Sri Lankan capital Colombo. The next port of call for Indian Bank outside India will be Jakarta in Indonesia, which in all likelihood will be a representative office, and then another branch in some Sri Lankan industrial town.
“We have got all necessary clearances from different departments of the Indian government including the Finance Ministry’s go ahead to RBI. We are expecting to get the license within a fortnight’s time. In such an eventuality, we are hopeful of setting up a branch there by November,” T M Bhasin, Chairman & Managing Director, Indian Bank said.
Justifying their decision to go to Jaffna, Bhasin said, “There are a lot of opportunities coming in Jaffna. About Rs 1,000 crore has been earmarked for housing development in Jaffna—mostly for rehabilitation of the Indians. Besides, there are a lot of opportunities for entrepreneurship development”.
It may be mentioned here that the bank mostly caters to the banking needs of the Tamil Diaspora in overseas locations.
A S Bhattacharya, Executive Director, Indian Bank, said that Indian Bank actually had its operations in that part of Sri Lanka way back in 1914 but that branch had to be closed afterwards. It decided to start afresh its operations in the country after Sri Lankan president Mahinda Rajapaksa asked the bank to open branch there during his recent visit to India.
Meanwhile, the bank has clocked a net profit of Rs 100 crore from its Singapore operation and Rs 32 crore from Colombo branch. “I expect that this will also become a Rs 1,000 crore branch within a few years,” Bhasin said. With the Jaffna branch being fully operational the bank is eyeing a net profit of Rs 200 crore from its global operations within a year’s time.
On the proposed Rep Office in Jakarta, Bhasin said “From our experience we have seen that lot of business originating from that region comes to our Singapore branch. We find lot of opportunities wherever there is ethnic Tamil population.”
Addressing a press conference in Kolkata, he said that the bank is hopeful of achieving 24 per cent growth in credit and deposit this year. While its credit has grown by 24 per cent during the first two quarters of the fiscal deposit has grown by 19-20 per cent. As on date total business of the bank has crossed Rs 1.62 lakh crore with deposits over Rs 96,000 crore and advances over Rs 66,000 crore. With a provision coverage ratio of 83 per cent, Indian bank is planning to bring down its gross NPA to 1.25 per cent and net NPA to 0.5 per cent. Net interest margin (NIM) of the bank stands at 3.71 as on June 2010.
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