3 PSU banks have received around ₹610 Cr from liquidation of their international JV

Synopsis: 3 leading PSU banks have received consideration from liquidation of their JV India International Bank Malaysia in which Bank of Baroda holds the majority stake of about 40 percent.

The article outlines stake-wise distribution of proceeds between three Indian PSU banks, highlighting what are the financial implications of the transaction for the participants after liquidation of this joint venture in Malaysia leading to possible decline in overseas sales.

The Joint venture IIBMB: 

India International Bank Malaysia Berhad (IIBMB) was incorporated in Malaysia in August 2010 by Bank of Baroda, Union Bank of India (e-AB) & Indian Overseas Bank, with operations commenced in July 2012. The company was  undertaking a banking business offering deposit and loan products to cater to needs and requirements of customers of Malaysia.

IIBM with its extensive network of branch through the promoter banks’ in India and in the world’s major financial centers such as New York, London, Brussels, Dubai, Hong Kong and Singapore, is able to leverage on these network of branches and global connection to offer customers a complete range of financial solutions which are tailor-made to their diverse needs.

The promoter banks recently received an interim capital repatriation from the liquidator as part of the process.The bank is permanently closed and is currently undergoing a Member’s Voluntary Liquidation (MVL) process to wind up operations and distribute assets back to its shareholders which is valued around Rs. 610 crores. 

Shareholding Structure and Distribution of Proceeds 

Bank of Baroda received the largest share of the interim capital repatriation from the liquidation of India International Bank Malaysia, in line with its 40 percent stake, amounting to about $29.39 million. The payout marks a key step in winding up the overseas joint venture and returning capital to its Indian partners.

Union Bank of India and Indian Overseas Bank also received their proportionate shares from the liquidator. Union Bank, which held a 25 percent stake, received around $18.37 million, while Indian Overseas Bank, with a 35 percent holding, got about $25.71 million, completing a major part of the interim distribution process.

Overall, the closure of India International Bank Malaysia brings a long chapter of overseas operations to an end for the PSU banks involved. By liquidating the joint venture and bringing the capital back home, the banks will be able to unlock value from a non-core business, streamline their international presence, and add a one-time boost to their financial position.

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