Ibu Banking Company is engaged in money market operations and its shares are held equally between Bank of Baroda, Indian Bank and Union Bank of India. In order to take over the company, BoB will purchase shares from Indian Bank and Union Bank of India.

In order to start operations in Hong Kong, BoB will have to seek permission of Hong Kong monetary authority, the country's central bank. Chakrabarty said the bank will be shortly appointing an executive director to take charge of the operations of the Ibu Banking Company.

The banking company which was not operating due to lack of funds, can now hope for infusion from the bank for additional investment, he said. He said by acquiring the company, BoB will be able to synergise its international operations along with expanding its inter-bank and money market operation overseas.

BoB has 40 overseasbranches which include branches in London, Brussels, New York and Dubai. Ibu Banking Company will be doing the wholesale banking with concentration only on deposits taking and not on retail segment, which has been major focus of the bank in the country.

Acquiring of the company is also part of the bank's long-term planning to synergise domestic and international operations for resource management as recommended by consultancy firm Deloite Touch.

The consultancy firm has also suggested BoB to offer new financial products for exporters and importers. It has also asked the bank to go into factoring services. BoB has already set up a committee to look into the recommendations of the consultancy firm.