Subramaniam Sharma, Bloomberg
New Delhi: Oriental Bank of Commerce and a unit of Industrial Development Bank of India Ltd, tied up to attract retail investors to a stock market whose benchmark index has more than doubled in the last two years.
The customers of Oriental Bank of Commerce will be able to buy and sell stocks of Indian companies and units of mutual funds on the website of IDBI Capital Market Services Ltd, the two companies said in a joint news release in New Delhi today.
India’s state-run banks such as Oriental Bank are forging partnerships with other local banks and overseas financial companies to offer a wider range of services to retain existing customers and attract new ones.
“We’d like to become a shopping mall not just a plain- vanilla provider,” K.N. Prithviraj, chairman and managing director at Oriental Bank of Commerce told reporters today in New Delhi, where the bank is based. “State-run banks in India have a low share of fee-based income. We have to develop other sources of income.”
Shares of Oriental Bank have declined 24% since the start of the year, compared with a 7.3% decline in the 30-stock benchmark Sensitive index of the Bombay Stock Exchange.
In India, where the economy is expanding at a 9.2% annual rate, the benchmark Sensitive index, known as the Sensex, has more than quadrupled since the end of 2001.
Earlier this month, Oriental Bank along with HSBC Holdings Plc, Europe’s largest bank, and Canara Bank, a state-run lender, formed a life insurance venture to tap the country’s $24 billion (Rs1,04,504 crore) insurance market.
In September, Oriental Bank formed an alliance with Corporation Bank, partly owned by India’s biggest life insurer, and Indian Bank to pool resources and work together in financial markets to cut costs and compete with bigger rivals.
In November, Mumbai-based IDBI Capital Market, a fully-owned subsidiary of Industrial Development Bank, signed an agreement with Punjab National Bank, the country’s third-biggest lender by assets, to offer its customers Internet-based share trading services.
Oriental Bank has about 1,233 branches and 8.8 million customers, Prithviraj said.