By Subramaniam Sharma/Bloomberg
New Delhi: Oriental Bank of Commerce and a unit of Industrial Development Bank of India Ltd have 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 will be able to buy and sell stocks of Indian companies and units of mutual funds on the Web site of IDBI Capital Market Services Ltd, the two companies said in a joint news release in New Delhi on 21 March.
Public-sector 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 said 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 Sensex.
Earlier this month, Oriental Bank along with HSBC Holdings Plc, Europe’s largest bank, and Canara Bank, formed a life insurance venture to tap the country’s $24 billion (Rs1.06 lakh crore) insurance market.
In September, Oriental Bank formed an alliance with Corporation Bank, partly owned by Life Insurance Corporation, 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 IDBI, 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.