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Tuesday, December 12, 2006

BoI to acquire 76 pc stake in Indonesia's Bank Swadesi

Public sector banking major, Bank of India (BoI), will acquire a controlling 76 per cent stake in Indonesia's PT Bank Swadesi, for which it has already obtained necessary regulatory approvals from both the countries.

"We have already obtained approvals from both the RBI and the appropriate authorities in Indonesia for taking over the bank," BoI's Executive Director K R Kamath told PTI here today.

BoI has signed a conditional sale purchase agreement with the majority shareholders of the Indonesian bank to buy the 76 per cent stake in a deal estimated at around USD 20 to 25 million (nearly Rs 112 crore).

Pointing out that acquiring a stake in an existing bank made great economic sense than setting up a branch, Kamath said that BoI had been present in Indonesia for the last 33 years through its representative office.

"This acquisition will help us enhance our presence and scale up our operations there," he said.

The 38-year-old Indonesian bank has an asset size of USD 100 million and has been focussing on retail lending to individuals and trade. "Their scale of operations has been low in the last couple of years and we intend scaling it up," Kamath said.

The bank has four branches, five sub-offices and 370 employees and is considered a mid-sized bank as per Indonesian standards, he said.

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