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How it began
Indian Overseas Bank (IOB) was founded on February 10th 1937, by Shri.M.Ct.M. Chidambaram Chettyar, a pioneer in many fields - Banking, Insurance and Industry with the twin objectives of specialising in foreign exchange business and overseas banking.
IOB had the unique distinction of commencing business on 10th February 1937 (on the inaugural day itself) in three branches simultaneously - at Karaikudi and Chennai in India and Rangoon in Burma (presently Myanmar) followed by a branch in Penang.
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At the dawn of Independence IOB had 38 branches in India and 7 branches abroad. Deposits stood at Rs.6.64 Crs and Advances at Rs.3.23 Crs at that time.
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Pre-nationalisation era (1947- 69)
During the period, IOB expanded its domestic activities and enlarged its international banking operations. As early as in 1957, the Bank established a training centre which has now grown into a Staff College at Chennai with 9 training centres all over the country.
IOB was the first Bank to venture into consumer credit. It introduced the popular Personal Loan scheme during this period.
In 1964, the Bank made a beginning in computerisation in the areas of inter-branch reconciliation and provident fund accounts.
In 1968, IOB established a full-fledged department to cater exclusively to the needs of the Agriculture sector.
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At the time of Nationalisation (1969)
IOB was one of the 14 major banks that was nationalised in 1969.
On the eve of Nationalisation in 1969, IOB had 195 branches in India with aggregate deposits of Rs. 67.70 Crs. and Advances of Rs. 44.90 Crs.
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Post - nationalisation era (1969-1992)
In 1973, IOB had to wind up its five Malaysian branches as the Banking law in Malaysia prohibited operation of foreign Government owned banks. This led to creation of United Asian Bank Berhad in which IOB had 16.67% of the paid up capital.
In the same year Bharat Overseas Bank Ltd was created in India with 30% equity participation from IOB to take over IOB’s branch at Bangkok in Thailand.
In 1977, IOB opened its branch in Seoul and the Bank opened a Foreign Currency Banking Unit in the free trade zone in Colombo in 1979.
The Bank has sponsored 3 Regional Rural Banks viz. Puri Gramya Bank, Pandyan Grama Bank, Dhenkanal Gramya Bank
The Bank setup a separate Computer Policy and Planning Department (CPPD) to implement the programme of computerisation, to develop software packages on its own and to impart training to staff members in this field.
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Post Reform Period - Unprecedented developments (1992 & after)
IOB entered Web site during the month of February 1997.
IOB got autonomous status during 1997-98
IOB had the distinction of being the first Bank in Banking Industry to obtain ISO 9001 Certification for its Computer Policy and Planning Department from Det Norske Veritas (DNV), Netherlands in September 1999. This Certification covers Design, Development, Implementation and Maintenance of software developed in-house, procurement and supply of hardware and execution of turnkey projects.
IOB started STAR services in December 1999 for speedy realisation of outstation cheques. Now the Banks has 14 STARS centres and one Controlling Centre for providing this service.
During 1999, IOB started tapping the potential of internet by enabling ABB card holders in Delhi to pay their telephone bills by just logging on to MTNL web site and by authorising the Bank to debit towards the telephone bills.
A Voluntary Retirement Scheme was introduced in the Bank on the lines of IBA package with Boards approval. The scheme was offered to Officers/Employees from December 15, 2000.
The Bank made a successful debut in raising capital from the public during the financial year 2000-01, despite a subdued capital market. The issue opened on September 25, 2000 for raising Rs.111.20 crore and was oversubscribed by 1.87 times. The issue closed on September 29, 2000 - on the earliest closing day. The allotment was made in October 2000. Consequent to the public issue, the share of the Government in the Bank's capital came down to 75%. The shares of the Bank have been listed on the Madras Stock Exchange (Regional), Stock Exchange at Mumbai and the National Stock Exchange of India Ltd.
IOB bagged the NABARD's award for credit linking the highest number of Self Help Groups for 2000-2001 among the Banks in Tamil Nadu.
IDRBT (Institute for Development and Research in Banking Technology) conferred the Best Award under Banking Technology to IOB. The award was given for the innovative use of banking applications on INFINET (Indian Financial Network) for the year 2001. Mobile banking under SMS technology implemented in Ahmedabad and Baroda. Pilot run of Phase I of the Internet Banking commenced covering 34 branches in 5 Metropolitan centres. IOB was one among the first to join Reserve Bank of India’s negotiated dealing system for security dialing online.
The Bank has finalised an e-commerce strategy and has developed the necessary internet banking modules in-house. For the first time a Total Branch Automation package developed in-house has been customised in one of the Overseas Branches of the Bank.
Most software developed in-house.
IOBNET connects Central Office with all Regional Office.
The Bank has paid a maiden dividend of 10% p.a for 2000-01, followed by 12% during 2001-02.
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Performance During 2002 - 2003
Operating Profit improved to Rs.794 crore.
Net Profit up by 81% at Rs.416 crore.
Owned funds rose to Rs.1460 crore from Rs.1133 crore.
Profit per Employee rose to Rs.1.70 lac from Rs.93,000.
Ratio of operating profit to average working funds went up from 1.78% to 1.99%.
Return on Assets leaped from 0.65% to 1.01%.
EPS up from Rs.5.18 to Rs.9.35.
Domestic Net Interest Margin improved to 3.14% as of March 2003.
Business per Employee improved to Rs.204 lakh from Rs.175 lakh.
Capital Adquacy Ratio improved from 10.82% to 11.30%.
The Bank’s global deposits stood at Rs.36699 Crore and global gross advances stood at Rs. 17447 crore.
Domestic Deposits grew by 14.03% (System - 12.20%). Domestic deposits grew by Rs.4770 crore to Rs.35717 crore.
Domestic Advances grew by 16.28% (System - 15.45%). Net domestic advances grew by Rs.2281 crore to close at Rs.16068 crore.
Deposits and advances growth has been above that of the System for most part of the financial year.
Priority Sector lending continues to be significantly higher at 42.9% (Norm 40%).
Agriculture Business Consultancy Services (ABCS) has been making steady progress in offering consultancy services for hi-tech agricultural projects with a special thrust on projects for wasteland development, dry land horticulture, herbal / medicinal plants cultivation, food processing and setting up of cold storages.
Housing finance has been extended to the tune of Rs.591 crore under direct housing finance during the year. Special Housing Finance Divisions have been set up at various branches throughout India for giving a push to housing finance.
During 2002-03, the Bank had sanctioned educational loans to the tune of Rs.143 crore under Bank’s Vidya Jyothi Educational loan scheme benefiting 7021 students.
The Bank has issued 1.45 lakh Kisan Credit Cards during 2002-2003 and as of March 2003 the total number of cards in circulation being 4.12 lac cards.
Under Micro Credit 13,802 Self Help groups were credit linked during the year and till March 2003, 30899 Self Help groups were credit linked.
Weaker section credit was 10.8% of net bank credit (norm 10%).
Banks credit to women constitutes 5.5% of the net bank credit against the stipulated norm of 3%
Sakthi IOB Chidambaram Chettiar memorial trust was formed by the Management of the Bank, Officers’ Association and Workmen Union in 1995. The objective of the trust is to empower downtrodden women by enabling them to have access to vocational training. The trust has so far trained 1331 women in various job oriented courses like tailoring, nursing, retail management, computer and secretarial practice and screen printing.
Under Prime Minister’s Rozgar Yojana (PMRY), 6443 borrowers were assisted to the tune of Rs. 33.40 crore.
The Bank continues to lay emphasis on retail credit and mobilisation of low / no cost deposits through efficient and quick customer service and expansion of the client base horizontally.
IOB has developed over the years an array of products to meet the specific needs of customers especially the retail segment.
Personal loans for purchase of consumer durables continues to be a popular retail product of the Bank.
A new credit scheme " Shubh Yatra " was introduced to provide loans to those who undertake foreign travel for tourism, employment and medical treatment.
Another scheme "Sanjeevini " was designed to extend loans to Medical Practitioners, hospitals, etc. for expansion and equipments.
The Bank has recently launched a new product in alliance with Life Insurance Corporation of India - IOB Chiranjeevi Bima Yojana. This provides the customer the benefit of life insurance cover. The Bank as a Corporate Agent markets the life policies of Life Insurance Corporation of India and non-life products of National Insurance Company at select branches.
IOB Akshay is another product that provides loan against life policies of LIC and other private insurance companies approved by IRDA.
Another product introduced by the Bank is “Money Home”. This provides a fast track channel for remittances from the USA to India to benefit our customers.
All the 3 Regional Rural Banks sponsored by the Bank recorded profits in 2002-2003.
Pandyan Grama Bank has been adjudged the best and Dhenkanal Gramya Bank ranked 7 among 196 RRBs in a private survey on banking.
Foreign exchange turnover of the Bank amounted to Rs.18494 crore in 2002-03, as compared to Rs. 15244 crore during 2001-02, giving a growth rate of over 21%. Higher growth in forex business has been achieved despite the appreciation of the rupee, global recession and deceleration in Precious Metals business, owing to volatile gold price in the international market.
Export Credit stood at Rs.1160 crore as on 31st March 2003.
The new Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI) empowers Banks to take series of actions to enforce securities charged to the Bank, which were not available earlier. 1830 notices involving an amount of Rs. 499.92 crore have been issued till March 2003 by the Bank under the SARFAESI Act to the NPA borrowers. Recovery made under SARFAESI Act was Rs. 23.74 crore involving 645 accounts upto March 2003.
Net NPA ratio down to 5.23% from 6.32%.
The Bank has lead responsibility in 12 districts in Tamilnadu State and one district in Kerala State. The Bank is also the convenor of State Level Bankers’ Committee for Tamilnadu State.
As of March 2003, IOB had 1427 branches in India and 6 branches overseas. Besides the Bank had 243 Extension Counters. IOB has specialised branches to cater to the exclusive needs of Commercial & Industrial credit (the branch has received ISO 9002 certification), Industrial finance, Small Scale industries, hi-tech agriculture and foreign exchange. The bank is a depository participant. To meet the needs of investors in the capital market the bank has two exclusive offices one at Mumbai and the other at Chennai. The Bank opened its first Asset Recovery Management Branch in Chennai on 21st February 2003. It would focus on recovery of dues under DRT cases of Chennai (Metro) and (Non-Metro) Regions of the Bank.
544 branches have been totally computerised and 883 branches have been partially computerised as of March 2003. In all 1427 branches have been brought under computerisation i.e. 100% of the bank's branch network as of March 2003 is covered under computerisation. 100 Automated Teller machines (ATM) in-operation, 42 centres are linked under Any Branch Banking (ABB) covering 293 branches.
The Bank’s house magazine in Hindi “VANI” got the first prize in the Hindi House Journal competition conducted by Reserve Bank of India for the year 2000-2001.
Vision of the Bank is
“To Emerge as the most competitive Bank in the Industry”
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