New Delhi, Sept. 5 (PTI): Oriental Bank of Commerce has evinced interest in merger with a south India-based bank while preparing itself for listing on US bourse within three years subject to necessary approvals from the government.
“We are eager for merger. We will be interested if a south-based bank comes into our fold,” OBC chairman B.D. Narang said, adding everything will depend on government nod.
Although Delhi-based OBC currently has branches in 85 per cent of the top business centres, its branch network is predominantly spread across the northern part of the country.
A merger with a south India-based bank would increase its toe-hold in that part of the country. Nationalised in 1980, OBC grew in size after Punjab Cooperative Bank and Bari Doab Bank were merged into it in 1996.
Narang said the bank is preparing itself for getting listed on the New York Stock Exchange within three years.
The three things that the bank has undertaken include conforming to the stringent US generally accepted accounting principle, adhering to the international norms for NPA provisioning and completing networking of all its branches.
“We are focussing on cleaning the balancesheet and preparing it as per US Gaap,” Narang said. This is necessary for companies to come up with ADRs and listed on US bourses.
OBC also intends to move over to the international practice of making provision for 80 per cent of its non-performing assets by next fiscal.
“We have provided for 55 per cent of NPAs last fiscal as against the RBI stipulated 27 per cent. We will tighten the provisioning to 75 per cent of NPAs this fiscal and finally to 80 per cent next fiscal,” Narang said.
OBC is one of the few public sector banks which has an NPA of around 3 per cent and is second in the list with Corporation Bank leading the chart with 2.31 per cent net NPA.
“We want the net NPAs to come down further to 2 per cent by the end of this fiscal,” Narang said pointing to the low NPAs of leading foreign banks.
Apart from improving the financial parameters, the bank plans an investment of Rs 280 crore for technology initiatives, the chairman said.
The bank has sought Reserve Bank’s permission for opening 12-13 more branches while plans to set up 50-60 ATM centres across the nation.