Mumbai: Public sector banks - Indian Overseas Bank (IOB), Bank of Baroda and Andhra Bank - will together launch a new bank, India International Bank Ltd, in Malaysia in the January - March quarter of 2011, IOB chairman and managing director M Narendra said.
“We have got all the permissions required and have also started renovation work on the premises. We will finish everything and hope to launch in the first quarter of 2011,” he said.
India International Bank will be the first bank of Indian origin in Malaysia with a branch in Kuala Lumpur.
“We will be allowed to raise deposits and hope to expand the operations also because there is a large number of Indian population there and also there is a huge potential for trade flows between India and Malaysia,” said V Krishnaswamy, general manager at IOB.
IOB and Bank of Baroda will own 35% each in India International Bank, while 30% will be owned by Andhra Bank. All three banks together will contribute a total of $90 million, Krishnamurthy said.
Narendra said the three banks have come together to diversify risk as well as to leverage their financial strength in Malaysia. “Three of us will particularly be able to build scale in raising capital and help us to diversify risk particularly to fund cross border M&As,” he said.