Mumbai, Apr 5: Leading public sector banking major, Bank of Baroda (BoB), has decided to restructure its three subsidiaries by end of current financial year, expand its retail banking in the next two years, enter the life insurance business in next three months and tie-up with a stock-broking firm in the next six months to provide value-added services to its customers.
''Our top priority presently is to recast our subsidiaries and we plan to complete it by the end of current fiscal,'' Bank's CMD A K Khandelwal said here today.
The three subsidiaries are BoB Capital, BobCards, its credit card subsidiary, and BoB AMC, its mutual funds arm.
Mr Khandelwal said the bank will also foray into the high-potential life insurance business within the next three months, while plans are being fine-tuned for a tie-up with a stock-broking firm within the next six months to provide value-added services to customers.
Earlier, the bank had recast its housing finance subsidiary, BoB Housing, by merging it with the bank. '' We will use the 25 offices of BoB Housing now available to us not only for our housing finance business but also to drive our retail banking business,'' Mr Khandelwal said.
While accepting that the subsidiaries have not performed as well as they should have, the CMD said restructuring could involve capital infusion, exploring possibilities of joint ventures and strengthening operational efficiencies.'' We will look at all issues such as capital, skill of our personnel, products portfolio and building up of domain knowledge.'' BoB, whose total business was Rs 1,55,000-crore in 2005-06, has recently appointed management consultancy company, McKensie, to advise it on business transformation strategies.
The bank is now focussing on its western Indian operations ''where we are the strongest but where the competition is also the maximum,'' Mr Khandelwal said, adding they are devising strategies to retain its leadership position in the region in terms of new products, tie-ups, positioning and operational efficiencies.
BoB is also fine-tuning its plans to give a strong thrust to its retail banking business and aims to up its retail banking portfolio to 25 per cent from the present 18 per cent in the next two-year period.
''An important focus area will be the small and medium entreprise segment,'' Mr Khandelwal said, adding they have appointed a deputy general manager to oversee business in this segement.