The Finance Ministry has asked the public sector banks (PSB) to work collectively towards expanding their operations in offshore projects.
The ministry has selected 26 state owned lenders to venture into 42 countries mainly from Africa, Soviet bloc, South America and South East Asia. Most of these are developing economies / emerging markets.
Seven Leading PSBs would take initiative in the process; these are SBI, Bank of Baroda (BoB), Punjab National Bank (PNB), Bank of India (BoI), Indian Overseas Bank (IOB), Central Bank of India, and Union Bank of India.
The approach from ministry is on the concerns of higher capital requirement for offshore projects, so the banks can meet this efficiently, and also the banks compete in a healthy environment.
The responsibility of African and South American countries has been allotted to SBI, which would cover 11 nations including Argentina, Brazil, Chile and Peru. Collectively SBI would team with BoI to buy a bank in Ethiopia, while BoB and SBI are told to scan for opportunities in key towns of South Africa.
PNB which is already present in the Soviet Bloc in Kazakhstan would scrutinize the neighboring states of Kyrgyzstan, Uzbekistan, Tajikistan, and Turkmenistan. SBI and BoB would make inroads into the remaining Soviet Bloc states of Belarus, Azerbaijan, and Ukraine.
For the South East Asian expansion plans, the ministry has allotted Thailand and South Korea to IOB; Cambodia to BoI; Vietnam to BoI; SBI and BoI together would look after Indonesia and Philippines; and Myanmar would be responsibility of SBI, BoI and IOB.
As of August 2011, SBI and BoB together had nearly 51% of the total 244 foreign branches of Indian banks