Bank of Baroda CEO unveils plans for credit card business, insurance JV

Bank of Baroda is considering finding a new investor for its credit card business within the next 12 months and launching a potential IPO for its IndiaFirst Life Insurance Co. Ltd. joint venture over the next 18 to 24 months, Reuters reported March 9, citing Sanjiv Chadha, the bank's CEO.

The Indian lender sought the help of McKinsey & Co. to carry out its plans, aiming to strengthen its position following the coronavirus pandemic.

A new investor would have access to the bank's credit card business, which caters to more than 500,000 customers and offers various Visa- and Mastercard-linked options. Meanwhile, the bank, which has a 44% shareholding in the insurance joint venture, splits ownership of the company with Union Bank of India, with a 30% stake, and Carmel Point Investments, with a 26% interest.

Bank of Baroda intends to deploy excess capital from its operations offshore to its domestic business, where returns are higher. It also plans to hire banking services agents and deploy them at locations other than its existing branches or ATMs, according to Chadha.

As of March 9, US$1 was equivalent to 72.90 Indian rupees.