Chennai-headquartered Indian Bank is considering setting up presence in Jaffna, the Sri Lankan town,

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which not long ago was under control of the now-defeated Liberation Tigers of the Tamil Eelam (LTTE).

T M Bhasin, newly appointed chairman and managing director, Indian Bank, told Financial Chronicle that the Sri Lankan government has requested the bank to explore the possibilities of setting up a branch in Jaffna, where it once had a presence.

“We had a branch in Jaffna earlier that had to be closed due to the troubles affecting the region. The Sri Lankan government has now requested us to consider reopening the branch. We are actively looking at the possibility,” Bhasin said.

He said preliminary assessment suggests that a branch in Jaffna might give good business to the bank. “There are a lot of Tamil population of Indian origin in the region who would want to bank with us. We see good business opportunities there,” he said.

If the bank decides to open the branch, it will be the first Indian banking entity to re-establish presence in the earlier Tamil Tigers- controlled area. Indian Bank at present has two overseas branches, with one of them being in the Sri Lankan capital, Colombo, and the other in Singapore.

Bhasin said that the bank plans to send its own team to assess the situation on the ground before taking a decision on the Jaffna initiative. “Although we are told that the region is at present calm, we are planning to assess the situation on our own before we take a final decision to have presence there,” he said.

The bank plans to send a team of its executives including an executive director and a couple of general managers to do a recce of Jaffna. Bhasin said that the bank also plans to take inputs from the Indian High Commission in Sri Lanka. “We will take a call in consultation with the Indian High Commission. It will also depend on our getting all the necessary regulatory clearances,” he said.

Bhasin said that the bank’s branches in Singapore and Colombo were doing brisk business. “The business turnover of the two branches together stood at around Rs 6,000 crore, with Singapore accounting for Rs 5,800 crore. We plan to increase the business to Rs 8,000 crore by the end of the present financial year,” he said.

Indian Bank also plans to explore possibilities of setting up new branches in other locations in Sri Lanka and the Maldives.