Bank Of India Sets Up New Corporate Banking Division

Bank of India (BoI) has revamped its corporate and industrial lending activity by setting up a new corporate banking division for lending to the corporate sector.

This is part of the overall re-structuring process the bank is undertaking based on the report prepared by consultants, Coopers & Lybrands.

The new corporate banking division has reduced the number of layers required for credit sanction thus speeding up the disbursal process. Further, to improve its client base, Bank of India will stress on relationship banking.

As part of the new corporate finance division, a project coordination department is being set up to look after the long-term lending activities of BoI. This is in view of the bankss plans to increase term lending activity.

 

Speaking to press persons, M G Bhide, chairman and managing director of Bank of India, said that the bank may also consider having separate prime lending rates for short-term lendings and long-term lendings.

Bhide felt that owing to the economic slowdown, operating cycles had lengthened lowering corporates demand for funds. Earlier, S P Talwar, deputy governor, the Reserve Bank of India, had discussed the issue of sanctions being higher than disbursals.

Attending officials felt that this was on account of the longer operating cycles which could have led to corporates not using the funds sanctioned to them.

As part of the restructuring process, Bank of India is merging its domestic money and forex trading activities. The two segments already coordinate with each other in the day-to-day operations. A separate dealing room will soon be set up.

Bhide also hopes to set up a global treasury for Bank of India which will coordinate with BoIs overseas offices also.

BoIs restructuring programme was implemented early this year in a phased manner.

The focus of the programme is on credit disbursement system, treasury management, improving infrastructure and human resources, among others.