Corporation Bank, Oriental Bank of Commerce (OBC) and Indian Bank are set to announce an alliance tomorrow that will virtually see them devising business strategies as one combined entity. | |
| Mangalore-based Corporation Bank and New Delhi-based OBC, which are listed, in identical notices to stock exchanges said the chairmen and managing directors of the banks will meet tomorrow "to discuss and if agreed, to sign a memorandum of understanding (MoU) for strategic business association in identified areas, for mutual benefit of the banks' customers." |
| |
| The three banks plan to pitch for business acquisition as one bank, leveraging the balance sheet strengths of all the three together for both loans and fee-based income businesses. |
| |
| The prospective alliance also envisages joint preparation of plans for expansion of branch and ATM networks and lateral movement of employees from one bank to another. |
| |
| The proposed strategic alliance, an unprecedented one, is akin to the one that has been employed by global airlines. |
| |
| The strategy has been thought of as an alternative to the inability of public sector banks to consolidate in the face of stiff political opposition. |
| |
| Corporation Bank Chairman B Sambamurthy, OBC Chairman K N Prithviraj and Indian Bank Chairman K C Chakrabarty are meeting in Mumbai and an announcement is expected to be made in the afternoon. |
| |
| Corporation Bank and Indian Bank have strong presence in the southern parts of India, while OBC has greater presence in northern India. |
| |
| The strategic alliance includes sharing of branches and ATMs. The three banks together have a network of 3,633 branches. |
| |
| The combined asset base of the three banks is Rs 1,47,079 crore, higher than that of Punjab National Bank, the country's second largest public sector bank. State Bank of India, the country's largest bank, has over Rs 400,000 crore of assets. |
| |
| The largest private sector bank, ICICI Bank, has an asset base of close to Rs 200,000 crore. |
| |
|
| |
