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PNB drops plans for Canada foray

Abhijit Lele  |  Mumbai 

Punjab National Bank

Public sector lender Punjab National Bank (PNB) has dropped plans to enter the Canadian market, after the country reviewed its overseas business and regulatory norms. ICICI Bank, which has presence in that country, has scaled down operations and repatriated part of capital back to India.

A senior PNB executive said now the bank was no longer pursuing plans for Canada. The bank has for long been pursuing the matter with the Canadian banking regulator.

In the wake of rising pressure from stressed assets, consolidating their operations and getting their houses in order have become the priorities before Indian Although growth plans in overseas territories were very much part of their strategy, for now are going slow on them, said a public sector bank executive.

In July 2011, PNB had articulated plans about entering Canada. Growing population of Indian diaspora, as well as bilateral trade and investments had driven PNB to consider foray into the North American market.

PNB's overseas business at end of March 2014 rose by 35.6 per cent to $12.28 billion from $9.57 billion a year ago. The total business of the bank in Indian currency terms was Rs 8,00,666 crore comprising deposits of Rs 4,51,397 crore and credit of Rs 3,49,269 crore at the end of March 2014.

The bank has established overseas footprints through five branches, three subsidiaries, a joint venture and five representative offices.

Besides wholly-owned subsidiary in England, the Delhi-based lender holds 51 per cent stake in Druk PNB Bank Ltd (Bhutan) and around 84 per cent stake JSC SB PNB (Kazakhstan).

According to PNB's presentation in January 2014, it has got permission from RBI for opening of representative office in Yangon (Myanmar) and Dhaka (Bangladesh).

PNB's future overseas forays include upgradation of representative offices at Norway and Australia into branches, and exploring possibilities in Brazil, South Africa, Sri Lanka, and Mozambique.

The country's largest commercial bank State Bank of India (SBI) also operates in Canada through a subsidiary. SBI (Canada), set up in 1982, has seven branches, including at places like Toronto and Vancouver.

Another public sector lender, Bank of India, is also making efforts to establish branches in Canada.

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First Published: Tue, May 20 2014. 00:47 IST