At a time when big foreign banks are collapsing, Indian banks are sensing a

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huge opportunity to expand their footprint in the global markets. Latest on the list is the government-owned IDBI Bank, which will shortly start its overseas operations with a branch in Dubai and another branch in Bahrain.

The bank will also begin operations in Singapore, another favourite overseas destination of Indian banks with a huge expat Indian population.

The bank will start overseas operations more as a wholesale banking outfit, raising finances for Indian business operations in the region. After this, the lender may also begin retail lending operations.

“We will be starting operations in Dubai shortly. A few final approvals are awaited, after which the Bahrain operations will commence. This will be a wholesale branch that will focus on raising resources through external commercial borrowings (ECB) to assist Indian businesses in these regions,” said RK Bansal, chief financial officer, IDBI Bank.

The government of India holds 52.68 per cent stake in IDBI Bank. Indian financial institutions hold 16.93 per cent, foreign institutional investors (FIIs) hold 3.34 per cent, and others hold 11.45 per cent. It was started as a wholly-owned subsidiary of the Reserve Bank of India on July 1, 1964 as a project financing institution. IDBI Bank became a commercial bank in 2004.

Most PSU banks such as the State Bank of India (SBI), Bank of India, Bank of Baroda, which have an overseas presence, have registered a robust year-on-year growth of over 30 per cent in their international operations. Among all banks, SBI is biggest provider of corporate syndicated credit, capturing India-related business in high potential countries.

Meanwhile, the bank on Monday announced a slew of measures to boost flow of credit to micro, small and medium enterprises (MSME) sectors. The bank, in a release issued here, said it has reduced interest rate for micro industries by 100 basis points, while for medium enterprises, interest rates have been reduced by 50 basis points for fund-based exposures up to Rs 10 crore.

Increase in working capital limits, reduction in margin payment, softer loan terms for SMEs opting to start captive generation of power are some of the announcements made by the bank on Monday.

The Bank said it is planning to grant ad hoc Working Capital Demand Loans to MSMEs repayable in one year. MSMEs can now avail up to a maximum of 20 per cent of their existing fund-based limits, subject to an overall fund-based credit facility up to Rs 10 crore, the bank said.