A Bank of Baroda branch on Auckland's Dominion Road. Photo: RNZ
India's Bank of Baroda appears to be seeking buyers for its New Zealand subsidiary.
The state-owned lender first invited investment banks to assist in the sale of Bank of Baroda (New Zealand) Ltd in December 2021. The bank subsequently withdrew the invitation.
In December 2023, the lender again sought interest from investment banks to facilitate the sale of its New Zealand business, one of eight overseas subsidiaries owned by the bank. A deadline for submission of proposals was set for 24 January.
The invitation was advertised in large Indian news publications such as the Financial Express, Business Standard and Mint, among others.
RNZ has been unable to confirm whether any proposals were submitted to the lender.
Bank of Baroda was the first Indian bank to venture into New Zealand, opening branches in Auckland, Wellington and Manukau after incorporating in 2008.
Rahul Chopra, a Bank of Baroda customer in New Zealand for 12 years, understands the commercial factors that may lie behind the purported attempt to shed the lender's New Zealand shares.
"'New Zealand and India are making great progress in trade, and Bank of Baroda could have played a pivotal role, but I understand it's a commercial decision," Chopra says.
Chopra says banks such as Bank of Baroda are important for migrants wanting to transfer money from India and maintain ties with their home country.
Sameer Handa, chairman of the board of Bank of India (New Zealand), agrees.
"I think [Indian banks] play a significant role because they make it a lot easier for the diaspora to interact and do financial transactions back home with India," Handa says.
These days, however, an increasing number of people use third-party financial services such as Western Union, Orbit Remit and Wise for sending remittances back home.
Sameer Handa is chairman of the board of Bank of India (New Zealand). Photo: Supplied
Handa believes many in the Indian community in New Zealand wish to continue banking in established ways, preferring Indian banks over third-party financial services to conduct their transactions.
Bank of India is the only other Indian bank currently operating in New Zealand, having inaugurated its branch in Newmarket, Auckland, in 2011.
Handa suggests that financial regulations imposed by India may be among reasons why many Indian banks are not operating in New Zealand.
"Not every bank is given permission by the Reserve Bank of India to go overseas," he says.
However, he believes that increased competition will benefit customers.
"The more, the merrier," he says.
"I think it would be a shame if [Bank of Baroda] leaves because it has been operating in Fiji for over 60 years," Handa says. "There are rumors that it might leave, but I'll keep my fingers crossed.
"We'd love to have it as a competitor here."
In 2022, Bank of Baroda closed its operations in Hong Kong and South Africa. It also closed one of its branches in the United Arab Emirates in 2023.
Founded in India in 1908, Bank of Baroda operates 93 overseas branches across 17 countries. Domestically, it maintains more than 8100 branches and serves more than 131 million customers worldwide.
Bank of Baroda has been approached for comment.
Approached for comment, the Reserve Bank of New Zealand says it is "unable to comment on a retail bank's commercial decisions."