Indian Bank marks 75 years, moves to Sir Baron Jayatillake Mawatha

by Elmo Leonard

A Comprehensive Economic Agreement is to be signed shortly between India and Sri Lanka, and to go with it, joint-ventures between the island and subcontinent are expected to get off the ground. Indian Bank (IB) Colombo, wants to play a part as a financier for these joint enterprises. IB moved March 19 to its new premises, at Sir Baron Jayatillake Mawatha, Colombo 1, marking 75 years in Sri Lanka.

IB is fully computerised and is looking outward, to broadbase its services, and to take its banking to the masses. To do this, IB, which began 100 years ago in India, has plans to open branches in the island's metropolis, fulfilling the needs of its customers here, the bank's CMD, Dr. K. C. Chakrabarty said. By mid-year, the bank intends commencing internet operations.

IB is better known by old-timers for its presence in Main Street, Pettah, where it started operations in 1932; "even before beginning operations in New Delhi," the bank's CEO K. Raghavan said.

The main aim of IB, whose first overseas branch was Colombo, was to assist the trading community in Sri Lanka and to take advantage of trade relations between the British colonies at that time.

In 1990 the IB moved to Mudalige Mawatha, Colombo 1, until it moved again to its present premises, last week.

Dr. Chakrabarty was all praise for the bank's Sri Lankan customers. A bank is as good as its customers, he said.

The bank's regulator in Sri Lanka and India was also good, aiding its progress. The bank is now looking out for the next 25, 50 and 100 years. Indian Bank now counts branches in Singapore, Myanmar and Malaysia, while today, banking is trans borders.

The downfall of a bank is complacency; the banker can never rest, there is fierce competition all round, Dr. Chakrabarty said. Indian Bank also went through a spell of losses in the past decades, but has now come out of it.

Recently the bank formed a strategic alliance with two other public sector banks in India to face the challenges of consolidation, convenience and competition without sacrificing the legal identity of the banks concerned and to harness economies of scale.

IB, in February came up with an IPO of 8,595,000 shares of INR 10 each, in a book building process with a price band of IRN 77 to 91. Government of India holdings decreased from 100 to 80 percent.

IB's Foreign Currency Banking Units (FCBU) in Sri Lanka began operations to undertake offshore business, taking advantage of Central Bank's guidelines issue in 1979. The bank specialised in financing BOI projects in the island.

IB's FCBU was a very active player in the market till 1995 with total assets exceeding $175 million. After a lull of about 10 years, FCBU was reactivated from 2005, Chakrabarty said.

IB, since inception has been retaining the profit earned in Sri Lanka. In compliance with the guidelines of the Central Bank of Sri Lanka to increase the minimum capital requirement to $25 million, the bank has remitted $11.5 million during the past 15 months taking the total capital employed as at the end-December 2006 to over $19 million.

The minimum capital requirement will be built during the current year, two years before the stipulated time, Chakrabaty said.

[email protected]