Indian Overseas Bank Indian Overseas Bank (IOB; established 1937) is a major bank based in Chennai (Madras), with 1,400 domestic branches and six branches overseas. Indian Overseas Bank has an ISO certified inhouse Information Technology department, which has developed the software that 900 branches use to provide online banking to customers; the bank has a target to expand online banking to 1200 branches by the end of financial year 2007-08. IOB also has a network of about 500 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) and is one of the banks that the Govt. of India has approved for online payment of taxes. |Indian Overseas Bank | |Type |Public (BSE, NSE) | |Founded |Madras, February 10, 1937 | |Headquarters |Chennai, India | |Products |Loans, Credit Cards, Savings, Investment | | |vehicles etc. | |Website |http://www. ob. in/ | History • 1937: Shri. M. Ct. M. Chidambaram Chettyar establishes 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 (Chennai) and Rangoon (Yangon). It then quickly opened a branch in Penang and another in Singapore. 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 specialized in foreign exchange and overseas banking (see below). • 1960s: The banking sector in India was consolidating by the merger of weak private sector banks with the stronger ones; IOB absorbed five banks, including Kulitali Bank (est. 1933). • 1969: The Government of India nationalized IOB. At one point, probably before nationalization, IOB had twenty of its eighty branches located overseas. After nationalization it, like all the nationalized banks, turned inward, emphasizing the opening of branches in rural India. • 1988-89: IOB acquired Bank of Tamil Nadu in a rescue. 2000: IOB engaged in an initial public offering (IPO) that brought the government’s share in the bank’s equity down to 75%. International expansion • 1937-38: As mentioned above, IOB was international from its inception with branches in Rangoon, Penang, and Singapore. • 1941: IOB opened a branch in Malaya that presumably closed almost immediately because of the war. • 1946: IOB opened a branch in Ceylon. • 1947: IOB opened a branch in Bangkok and re-opened others. • 1948: United Commercial Bank (see below) opened a branch in Malaya. • 1949: IOB opened a branch in Bangkok. 1963: The Burmese government nationalized IOB’s branch in Rangoon. • 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. 1977: IOB opened a branch in Seoul. • 1979: IOB opened a Foreign Currency Banking Unit in Colombo, Sri Lanka. • 1992: Bank of Commerce (BOC), a Malaysian bank, acquired United Asian Bank (UAB). • 1999: Bank of Commerce (BOC) merged with Bank Bumiputra Malaysia to form Bumiputra-Commerce Bank (BCB) Berhad. • 2005: BCB integrates with CIMB which the company is own by the Datuk Seri Nazir Razak who is the youngest son of Malaysia’s second (former) Prime Minister Tun Abdul Razak from 1970 – 1976 and youngest brother of today’s (2005) deputy prime minister Dato Seri Najib Tun Razak. 2007: IOB takes over Bharat Overseas Bank. Company background One of the few public sector banks that have shown remarkable turnaround in asset quality, Indian Overseas Bank (IOB) shows very healthy growth prospects. The bank was established in 1937 with the twin objective of specializing in foreign exchange and overseas banking. The bank has been performing well until it was hit with the menace of NPA problems, which have been safely negotiated. The bank operates through a network of 1,457 branches and 165 ATMs.
The bank is not a big player in the retail market and has recently moved into stepping up the retail lending process. The bank is authorized to collect Government revenue, which helps it garner fee income. Business IOB has been showing impressive in its business (credit + deposits). The home loan outstanding amount increased 60% on yoy basis for 2004. The bank is one of the few banks meeting the priority as well as the agricultural lending target. Industry Background The Indian Banking sector has undergone a sea change in the past decade with the implementation of the ongoing banking sector reforms.
The sector over the years has Become more efficient with the implementation of prudential norms for asset Classification and improved thrust on technology advancement. The PSBs still dominate the sector with 75% of the market share of business and profits. The new private sector banks with their technology driven business model are fast catching up with the PSBs. The last two years has seen banks book windfall gains in treasury profits. With the interest rates hardening up, banks need to focus on core profit growth.
The Retailisation of the banks balance sheet has seen banks improve their asset mix with home loans, auto loans and personal loans. PRODUCTS/SERVICES OF INDIAN OVERSEAS BANK 1. CREDIT CARDS • IOB Visa Credit Card is a valuable substitute for cash or cheque. • Card is valid for use Internationally. • You can withdraw cash upto 40% of the limit assigned to you. • IOB entered into an arrangement with United India Assurance Co. Ltd. for covering you under various insurance facilities free of charge subject to usage of the card at least once in a quarter. 2. HOME LOAN Indian overseas bank offers home loan under various schemes such as home improvement scheme- for salaried individual having a| |confirmed service. Loan can be taken for repair, renovation, up gradation and making modifications, etc. Home Decor scheme – | |to furnish your home. You can apply for this loan if you are employed individual with 3 years of confirmed service but you | |must have your own home. Even NRI can take home loan to buy, build or renovate home. But there is a condition that the | |house/flat should be for your own occupation when you return to India. | Highlights | |Interest Rate |0% | |Loan Amount |Min. – Rs 100000 | | |Max. – Rs 10000000 | |Time to Process Loan |7 days | RATES TYPE RATES | |15 – 20 Yrs. | |Floating | |10. 75 % | | | | | |10 – 15 Yrs. | |Floating | |10. % | | | | | |5 – 10 Yrs. | |Floating | |10. 25 % | | | | | |1 – 5 Yrs. | |Floating |10 % | | | | | |5 – 10 Yrs. | |Fixed | |11 % | | | | | |1 – 5 Yrs. |Fixed | |10. 5 % | | | | | | | | | . FIXED DEPOSITS Indian Overseas Bank Fixed Deposits Indian overseas bank offers term deposit scheme for all. Deposits account can be opened individually or jointly. The amounts for deposits depend upon the cost of operations and the kind of services/ value additions offered. Bank calculates interest rate quarterly. 7 days to 14 days | |15 days to 29 days | | | |30 days to 45 days | |46 days to 60 days | | | |61 days to 90 days | |91 days to 120 days | | |121 days to 180 days | |181 days to 270 days | | | |271 days to less than 1year | |1 year – up to 719 days | | | |720 days | |721 days –up to 3 years | | | |Above 3 years to less than 5 years | |5 years and above | | | 4. CAR LOAN Loan Type | |Term Loan | | | | | |Ex-Showroom/On Road | |On Road | | | | | |Loan Amount | |Min. – Rs 50000 | |Max. Rs 85 | | | | | |Tenure | |Min. – 12 Yrs. | | | | | |Interest Rate | |13. 5 % | | | | | |Time to Process Loan | |7 days | | | | | |Preferred Manufacturers | |Chevrolet, FIAT, Ford, GENERAL MOTORS INDIA, HINDUSTAN MOTORS, Honda, Hyundai, Mahindra, Maruti, Mercedes-Benz, | |Mitsubishi,etc. | | | | 4. PERSONAL LOAN |Highlights | | | | | |Salaried | |Self Employed | | | |Loan Type |Term Loan | |Term Loan | | | |Loan Amount | |Min. – Rs 50000 | |Max. – Rs 1000000 | |Min. – Rs 50000 | |Max. Rs 1000000 | | | |Tenure | |Min. – 12 Yrs. | |Min. – 12 Yrs. | | | |Interest Rate | |Min. – 14. 25 % | |Max. – 14. 25 % | |Min. – 14. 25 % | |Max. – 14. 5 % | | | |Time to Process Loan | |7 days | |7 days | | | | | | |