Indusind To Invest Rs 25cr In Unit

IndusInd Bank Limited plans to invest Rs 25-30 crore in a wholly-owned subsidiary for investment banking to come up in the next few months.

This was revealed by M Lall, the banks senior vice president , who was in Calcutta to formally inaugurate the banks city branch . The subsidiary will involve itself in various aspects of investment banking like handling public issues, joint ventures, mergers and aquisitions and advisory functions. Though the bank is already involved in investment banking, its share in the total business of the bank is negligible.

The banks management intends to present the proposal for the subsidiary before its board in the next meeting. It will then need to obtain the approval of the Reserve Bank of India.(RBI).

 

IndusInd Bank at present is one of the best performing banks in the Indian banking industry. The banks deposits and advances grew by over 100 per cent between fiscal 1995 and fiscal 1996.

This fiscal too the bank has already exceeded its targets for deposits and advances. The projected net profit for 1996-97 is about Rs 70 crore as against Rs 45.6 crore last year.

With dividend payments of 15 per cent and 18 per cent in the last two fiscals, the bank hopes to declare a higher dividend this year. It has already declared a 10 per cent interim dividend .

As was reported in Business Standard, the bank has however, fallen Rs 100 crore short in its priority sector lending target. According to RBI norms, 40 per cent of all bank credit must be priority sector lending. Only about 34 per cent of IndusInds lendings for 1996-97 are core sector credit.

For the rest of this fiscal, the bank intends to concentrate on bridging this gap, specially through increased lending to the small scale industries.

Though the task appears a tall order with less than 40 days remaining in this fiscal, Lall is confident the target will be achieved.

Outlining the future plans of IndusInd Bank, Lall pointed out that it will soon be setting up branches in semi-urban areas like Avinashi (Tamil Nadu), Gajuwaka (Andhra Pradesh), Tiruvella (Kerela), Morbi (Gujarat), Gurgaon (near Delhi) and Mohali (near Chandigarh).

The next phase of expansion will cover locations like Jaipur and Baroda. In fact, the bank intends to open 30 more branches in the next fiscal.

Its plans, however, may be stymied by the RBI requirement that for every four urban branches that a private Indian bank has, it must have a branch in a rural or a semi-urban location.

IndusInd also plans to start its international forays this fiscal. Initially, it plans to set up representatitve offices in London, Dubai, New York and Hong Kong.