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Bank of Baroda (BoB) has decided to bring in a strategic partner in its subsidiary Nainital Bank Ltd. With this, the public sector bank is planning to divest its majority stake and relinquish its control of the subsidiary.
The move is also aimed at creating more value in the 100-year old NBL and also take it to a next level of growth and standing in the banking industry. At present, BoB holds 98.57 per cent stake in the Nainital Bank.
Inviting expression of interest, BoB in its preliminary information memorandum (PIM) said NBL needs additional capital to meet its business growth and capital expenditure for setting up new branches and improving infrastructure at the existing branches.
“There is a good opportunity for NBL to bring in a suitable partner and also leverage its growth potential by transforming itself from a traditional bank into a technology-based bank to enlarge presence and market share substantially,” per the PIM.
The strategic partner will help BOB to reduce its stake in percentage terms, which will help meet the regulatory requirement.
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NBL was originally promoted by Late Bharat Ratna Pandit Govind Ballabh Pant and few prominent personalities of Nainital in 1922. In 1974, the Reserve Bank of India directed Bank of Baroda to manage the affairs of NBL.
Registered office of NBL is situated at Nainital and RBI vide communique dated April 26, 2012 granted NBL permission to open branches in 5 States—Uttarakhand, Uttar Pradesh, Delhi & NCR, Haryana and Rajasthan. Presently, NBL has 166 branches and 1,158 employees.
As at March-end 2022, NBL had deposits and advances of ₹7,486 crore and ₹4,211.79 crore, respectively. The net profit of NBL rose to ₹28.93 crore in FY22, against ₹1.26 crore in FY21.
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