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June 4, 2001
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Money > Business Headlines > Report June 4, 2001 |
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BoB wants to be universal bank in 2 yearsK Ram Kumar & Yashajit Saha Bank of Baroda has set a two-year time frame for graduating into a full-fledged universal bank. To achieve this status of an institution offering the A to Z in financial services under one umbrella, the bank has embarked on an exercise involving strengthening the weakest link in its armour - information technology - in addition to scouting for strategic partners for its subsidiaries and increasing global presence. BoB has already kicked-off the move towards universal banking with a grand Rs 500-crore initiative that entails business process re-engineering, organisational re-structuring and deployment of cutting edge technology by engaging global IT consulting firm, Gartner. The whole exercise is expected to be completed over the next two years. "This will allow us to leverage the synergies that will result by aligning our human resources, IT and business functions", P S Shenoy, chairman and managing director of BoB said on the sidelines of a function to launch its electronic bill presentment and payment service in Mumbai. The facility is powered by 'BillDesk', a service of IndiaIdeas.com. Another area engaging the bank's attention is its four subsidiaries - BoB Housing Finance, BoB Asset Management Company, BoB Capital Markets and BoB Cards - for whom it is looking for strategic partners, who have the core competence in their respective areas of operations. "We want to reposition our subsidiaries in a strong way via partnerships. BoB will offer either 49 per cent or 51 per cent stake in the subsidiaries depending on what the prospective partner brings to the table in terms of technical and financial strengths," Shenoy said and added that he expects some of the alliances to be tied-up by the year-end. The bank, which currently has an international presence in 15 countries through its 39 overseas branches, four subsidiaries and one joint venture, will soon start a branch in Malaysia. It intends to step up its global presence as 25 per cent of its net profit come from overseas operations. Meanwhile, BoB is close to finalising the modalities of extending credit at sub-prime lending to its top-notch corporate customers. A proposal to this effect is expected to be presented to the board in the next 10 days. "We are expecting to maintain a net interest margin (spread) of 3 per cent without affecting our profitability even if we lend at sub-PLR," Shenoy said. The bank has set aside a corpus of Rs 500 million to finance investments in projects/start-ups that are deemed a bit risky. It has picked up a 10 per cent strategic stake by investing Rs 16 million in IndiaIdeas.com, a one-year old Bombay-based IT company. Powered by YOU MAY ALSO WANT TO READ:
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