Bank Of Punjab, Abn Amro In Talks For Strategic Alliance

Bank of Punjab (BoP) has initiated talks with the promoters of ABN Amro for a strategic alliance. "We have been talking with ABN Amro for sometime now although nothing has been finalised," executive director of Bank of Punjab, Tejbir Singh, said.

Asked whether the bank's management would transfer management control to a third bank, Singh said, "We have built the bank from scratch. Therefore, the question of handing over the management to a third party is not on our mind. But we will definitely look for an alliance if the synergy benefits both partners."

When asked if ABN Amro was the only suitor, Singh added, "We have had talks with some other foreign banks but these have been at the preliminary level."

Industry sources, however, pointed out that in cases such as these, lack of clear guidelines from the Reserve Bank of India had become a deterrent to strategic alliances. With guidelines having been cleared up by the apex bank, such alliances have become easier.

ABN Amro has four branches in four metros. A strategic tie-up with BoP would give it 54 branches in the BoP network. As ABN Amro has identified the retail sector as a thrust area, a tie-up with BoP will give it the leverage in terms of retail banking. BoP is largely a retail bank.

The post of managing director at the bank has fallen vacant with Sarabjit Singh retiring from the post a couple of months back. Asked whether he was a contender for the post, Tejbir Singh said, "We have advertised for the post and will fill it with someone from the banking industry in another couple of weeks."

Tejbir Singh took over as the executive director three years back prior to which he was managing other family businesses.

The promoters of bank along with its executive director and its chairman, Darshanjit Singh, holds 18 per cent, while another 18 per cent in the bank is held through persons acting in concert.

Private corporate bodies hold 17 per cent, while NRI's and oversea corporate bodies hold 9.82 per cent. Some 33.35 per cent is held by the general public.