The Bank of India (BOI) has inaugurated its first South African branch in Johannesburg, with a view to promoting India-South Africa bilateral trade. The branch will initially focus on corporate banking services and the SME sphere.
The Bank – which boasts over 54 million clients worldwide – will begin with a small operation in South Africa, with six or seven colleagues manning the branch and mainly providing corporate banking and lending services to Indian and South African corporate clients. BOI has a solid reputation for its SME funding services, and it intends to bring this reputation to South Africa, planning to act as a key funding and development agent for SMEs in the country.
At the opening ceremony, Alok Misra, chairman and managing director of BOI placed a great deal of emphasis on the expanding African market, and the development potential to be fulfilled by the growing SME trade sphere, stating that through providing solid financing services to the SME audience, BOI intended to be a: “key player in economic transformation in South Africa”.
With bilateral trade between the two countries on the rise, BOI claims that this is the opportune moment for a South African branch to be launched. Trade between the states has seen a doubling over the past five years. In the 6 months ended June 2012, the India-South Africa bilateral trade figure exceeded $10 billion, the highest figure to date, with BOI’s Misra predicting the figure to increase beyond $ 15 billion by the end of the year. Highlighting the Bank’s eagerness to forge ties with South Afria, Misra added that: “South Africa is the financial centre … the powerhouse of manufacturing and hub for Sub-Saharan trade.”
This spike in bilateral trade figures is largely attributable to increased trading of natural resources such as coal, oil, gas and gold, but also in products for the automotive and pharmaceutical sectors. India is now considered to be South Africa’s sixth largest export destination, and ninth largest source for imports.
The Indian state-owned Bank already has multiple offices on the African continent; spanning Kenya, Tanzania, Uganda and Zambia. However the bank intends the South African office to take a leading role in its African operations, and further global expansion. Misra told attendees at the opening ceremony that: “As a global extension of our operations and continued growth of outward Indian trade and foreign direct investment, in spite of recent economic challenges, our Johannesburg branch will provide strategic advantages to the Bank of India when competing in global markets.”