Indian Overseas Bank
|Traded as||BSE: 532388|
|Founded||Madras, 10 February 1937|
|Key people||M. Narendra
(chairman & MD)
|Products||Loans, credit cards, savings, investment vehicles etc.|
|Revenue||3576 billion (US$59 billion) (2012)|
|Net income||196 billion (US$3.3 billion)|
|Total assets||9217 billion (US$150 billion) (2012)|
Indian Overseas Bank (IOB) is a major bank based in Chennai (Madras), with about 3350 domestic branches, 3 extension counters and six branches overseas as of 31 March 2012. Indian Overseas Bank has an ISO certified in-house Information Technology department, which has developed the software that 3257 branches use to provide online banking to customers; the bank has achieved 100% networking status as well as 100% CBS status for its 3350 branches. IOB also has a network of about 2400 ATMs all over India and IOB's International VISA Debit Card is accepted at all ATMs belonging to the Cash Tree and NFS networks. IOB offers internet Banking (E-See Banking) & Mobile Banking and is one of the banks that the Govt. of India has approved for online payment of taxes.The bank's business more than doubled in the last four years.
The net profit for the year ended 31 March 2012 stood at Rs 10501 million. Total income stood at Rs 195781 million as against Rs 133265.6 million registered during the same period last financial year. For the full year, the total business grew by 24 per cent to Rs 3,217 billion from Rs 2,590 billion.IOB has planned to achieve total business of Rs 3.85 trillion to Rs 4 trillion this fiscal.
Pre-World War II
In 1937, Thiru.M. Ct. M. Chidambaram Chettyar established the Indian Overseas Bank (IOB) to encourage overseas banking and foreign exchange operations. IOB started up simultaneously at three branches, one each in Karaikudi, Madras, and Rangoon (Yangon). It quickly opened a branch in Penang and another in Singapore (1941). The bank served the Nattukottai Chettiars, who were a mercantile class that at the time had spread from Chettinad in Tamil Nadu state to Ceylon (Sri Lanka), Burma (Myanmar), Malaya, Singapore, Java, Sumatra, and Saigon. As a result, from the beginning IOB specialised in foreign exchange and overseas banking (see below). Due to the war, IOB lost its branches in Rangoon and Penang, and Singapore, though the branch in Singapore resumed operations in 1942 under Japanese supervision.
After World War II
In 1963 the revolutionary government in Burma nationalised Indian Overseas Bank's in Rangoon, Mandalay, and Moulmein, which became People's Bank No. 4. In the 1960s, the banking sector in India was consolidating through the merger of weak private sector banks with stronger ones; IOB absorbed five banks, including Kulitali Bank (est. 1933).
Then in 1969 the Government of India nationalised IOB. At one point, probably before nationalisation, IOB had twenty of its eighty branches located overseas. However, Malaysian law forbade foreign government ownership of banks in Malaysia. Therefore, United Commercial Bank, Indian Overseas Bank, and Indian Bank contributed their operations in Malaysia to a new joint-venture bank incorporated in Malaysia, United Asian Bank, with each of the three parent banks owning a third of the shares. At the time, Indian Bank had three branches, and Indian Overseas Bank and United Commercial Bank had eight between them.
After nationalisation Indian Overseas Bank, like all the nationalised banks, turned inward, emphasising the opening of branches in rural India. Still, in 1977 it opened a branch in Seoul, Korea.
In 1988–89, IOB acquired Bank of Tamil Nadu, and its 99 branches, in a rescue. Bank of Tamil Nadu (or Bank of Tamilnad), had been established in 1903 as the South India Bank in Tirunelveli.
The new millennium
In 2000, IOB engaged in an initial public offering (IPO) that brought the government's share in the bank's equity down to 75%. In 2001 IOB acquired the Mumbai-based Adarsha Janata Sahakari Bank, which gave it a branch in Mumbai. Then in 2009 IOB took over Shree Suvarna Sahakari Bank, which was founded in 1969 and had its head office in Pune. Shree Suvarna Sahakari Bank had been in administration since 2006. It had nine branches in Pune, two in Mumbai and one in Shirpur. The total employee strength was estimated to be little over 100.
- International expansion
As mentioned above, IOB was international from its inception with branches in Rangoon, Penang, and Singapore. In 1941, IOB opened a branch in Malaya that presumably closed almost immediately because of the war.
In 1946, after the War, IOB opened a branch in Ceylon. More overseas branches followed quickly. In 1947, IOB opened a branch in Bangkok and re-opened others. In 1948 United Commercial Bank (see below) opened a branch in Malaya. In 1949, IOB opened a branch in Bangkok.
Then in 1963, The Burmese government nationalised IOB's branch in Rangoon. In 1973, IOB, Indian Bank and United Commercial Bank established United Asian Bank Berhad in Malaysia. (Indian Bank had been operating in Malaysia since 1941 and United Commercial Bank Limited had been operating there since 1948.) The banks set up United Asian to comply with the Banking Law in Malaysia, which prohibited foreign government banks from operating in the country. Also, IOB and six Indian private banks established Bharat Overseas Bank as a Chennai-based private bank to take over IOB's Bangkok branch.
In 1977: IOB opened a branch in Seoul. Two years later, IOB opened a foreign currency banking unit in Colombo, Sri Lanka.
International expansion slowed thereafter, for a while. In 1992 Bank of Commerce (BOC), a Malaysian bank, acquired United Asian Bank (UAB).
In the new millennium, international expansion picked up once again. In 2007, IOB took over Bharat Overseas Bank. Three years later, Malaysia awarded a commercial banking license to a locally incorporated bank to be jointly owned by Bank of Baroda, Indian Overseas Bank and Andhra Bank. The new bank, India International Bank (Malaysia), will reside in Kuala Lumpur, which has a large population of Indians. Andhra Bank will hold a 25% stake in the joint-venture, Bank of Baroda will own 40% and IOB the remaining 35%.
Citations and references
- Turnell (2009), p.226.
- Turnell, Sean (2009) Fiery Dragons: Banks, Moneylenders and Microfinnance in Burma. (NAIS Press). ISBN 9788776940409