M. Balachandran (right), CMD of Bank of India, with C.K. Dhanuka, chairman of Ficci (eastern region), in Calcutta on Tuesday. Picture by Kishor Roy Chowdhury

Calcutta, July 18: Bank of India is returning to Tanzania after three decades. The public sector bank, with more than 20 offshore branches in 12 countries, has decided to set up a wholly owned subsidiary in Dar-es-Salam this year.

In 1967, the government of Tanzania nationalised Bank of India and Bank of Baroda’s operations in the African country and brought them under the fold of state-owned National Commercial Bank of Tanzania.

“We are planning to set up a 100 per cent subsidiary in Tanzania and a joint venture in Zambia. Besides, we will also open a representative office in South Africa,” said M. Balachandran, chairman and managing director, Bank of India. He was speaking at the third banking conclave organised by the eastern regional council of Ficci.

The bank will open representative offices in Doha and Beijing besides Johannesburg and upgrade its representative offices in Shenzen and Vietnam to full-fledged branches.

“We have got the necessary approvals from the Reserve Bank for this,” Balachandran said.

Back home, BoI is targeting a total business of Rs 2,00,000 crore by March 2007.

“Last fiscal, we did a total business of Rs 1,60,594 crore and we expect a 25 per cent growth in the current fiscal,” the chairman said. Bank of India is expecting a 25 per cent growth in advances and an 18 per cent surge in deposits in 2006-07.

However, Balachandran admitted that with a capital adequacy ratio of 10.75 per cent, the bank would require to raise more capital to provide for increased interest rate risks.

“The board of directors has approved a proposal to raise Rs 1,500 crore as tier II capital. However, our immediate need is Rs 500 crore, which we will raise from the domestic market in the form of upper tier II bonds,” Balachandran said.

“The rest we may raise either from the domestic or overseas markets,” he added.