Returning to Uganda for Business: The Story of Bank of India

What prompted you to return to Uganda?

Well, we were here from 1953 to 1972 before being forced out by political and economic instability that hit this country. But now we have seen the country having peace, the economy is growing, there is fertile land backed by favourable climatic conditions and above all the discovery of oil gives us more hope that the economy is moving forward. These and other factors have attracted us to return to Uganda.

What products and services are you going to offer?

We will be offering both wholesale and retail banking with special focus on small and medium enterprises, corporate clients and retail businesses. Our other major focus will be on agriculture financing.

You have come at a time when interest rates have gone up due to high inflation. How are you going to manage?

We have invested Shs 25 billion, which is the minimum capital requirement by Bank of Uganda. Our aim is to provide cost effective and efficient services to the people of Uganda and to the business community. So, with this strong capital base, we will not necessarily depend on the high deposit cost to take care of our borrowers’ needs but we will for the start depend on it to support businesses. We also believe that due to this heavy investment, we will be able to charge affordable rates compared to the ones on the market currently. We also believe that this troubled time will pass given the fact that inflation is declining and the exchange rate is appreciating. We are hopeful that things will gradually improve.

You are the 25th bank to open in Uganda, which means competition is on the rise. Aren’t you bothered?

Like I said you, it is not our first time to be in Uganda. We have been here and at least we have some experience in this country. We have come back with better technology and have recruited experienced local and foreign staff. I think people will certainly be attracted to us. But also, once there is high competition in any industry that automatically translates into better and cheaper services going to the people. We intend to charge marginally lower than what others are charging because of our strong capital base and we will be penetrating into the unbanked areas to serve the needs of the common man.

What is your track record in places where you operate?

We are an experienced bank. We started in India in 1906 - that is about 106 years ago - as a private bank until 1969 when it was nationalised by the government of India to become a private sector bank. In 1946 we opened a branch in London; similarly we opened another in Tokyo and Singapore 1950s. Presently we are among the top five public sector banks of India. It is a sovereign entity in which the government of India has the majority shareholding of 66%. We have a presence in 21 countries, have 49 offices internationally and we are listed in India. That tells you that this is a people’s bank. In India a lone, we do have more than 4,000 branches and 1,652 ATMs. Globally, we have a customer base of over 52 million and a business mix amounting to over US $110 billion.

What future plans do you have for Uganda?

We are hopeful that once the economy normalises, and after we have fully established ourselves, we will be able to open more branches in other areas especially the unbanked.

Only about four million Ugandans have bank accounts out of a population of 34 million. What are going to do to encourage more Ugandans to take up your financial services?

The most important thing is to have people getting to know what banking is all about. We will as a bank, together with other stakeholders, try to see to it that this issue is addressed such that the unbanked population is brought on board.

Banks appear to be concentrating in urban areas and giving little attention to rural areas. What is your view?

Actually we want to first have a foot hold in the country by starting in Kampala, the capital city, because we can only earn a good name by starting off operations in areas that have potential. If we start in remote areas, it will be hard for people to get to know about us. It is not that we don’t want to start in other areas but the reason is clear. Once we are firmly established we will go there.

What makes Bank of India different from other banks in Uganda?

I am not well conversant with other commercial banks in Uganda apparently. But like I told you, we have come with a mindset to give finance assistance to the people at affordable rates. We have equipped our premises with modern systems, security, we have recruited experienced staff from India and Uganda and with that, we are committed to provide very efficient and cost-effective services to the people.

By Julius Businge
The Independent Newspaper
13-May-2012