Bank of Baroda (BOB), India’s third-largest nationalised bank with global business worth more than $85 billion, is to establish commercial banking operations in New Zealand, initially with a branch in Auckland.

The bank will function as a subsidiary company, offering a wide range of banking services, sources in Mumbai told NBR last night.

It is understood that the subsidiary will be governed by a board, comprising local and overseas directors to meet Reserve Bank regulations and that the process is now in its final stages of approval.

The bank has appointed a senior executive to head the branch.

Dr Anil Kumar Khandelwal, who visited Auckland as chairman and managing director of the bank in May 2007, said BOB was keen to establish its presence in New Zealand, which he said offered immense growth potential to serve not only the Indian community but also other ethnic groups.

“BOB has its presence in 61 countries [now 71] around the world and we consider New Zealand to be an ideal destination for business.

“Apart from its booming economy, India’s ‘Look East Policy’ and market reforms, its increasing role in the Association of South Asian Nations countries afford closer economic, financial and social cooperation with countries such as Australia and New Zealand,” he had said.

Mr Khandelwal retired on March 31, 2008, following which the Indian government appointed M D Mallya as his successor.

As at the end of March 2008, the bank’s total deposits stood at $50.07 billion (up by 21.7% over the previous year), of which overseas deposits were $9.73 billion. Its gross profit was $997.25 million, while net profit, at $472.10 million, accounted for an increase of almost 40% over the corresponding period in March 2007.

Mr Mallya said the bank’s presence in New Zealand was part of BOB’s ambitious plans for expansion overseas, besides penetration in countries where it has presence to serve its 33 million global customers better.

“Among the other countries where BOB has plans to open branches or subsidiaries are Canada, Kuwait, Mozambique, Qatar, Russia and Saudi Arabia,” he said.

The bank opened a representative office in Australia last year, while its branch in Fiji has been in operation since 1961.

Since then, BOB’s presence in Fiji has expanded to include five more branches at Lautoka, Ba, Nadi, Sigatoka and Labasa, agencies at Rakiraki and Tauva and a fully equipped training centre in Suva