Central Bank of India is preparing to enter the wealth management and credit card segments during the second half of the current financial year as part of its strategy to strengthen fee-based income streams, Managing Director and CEO Kalyan Kumar has said.
The public sector lender has already secured board approval for both initiatives and is currently working on the implementation roadmap. "We are in the process of issuing a Request for Proposal (RFP) to onboard partners with the required expertise so that we can launch these businesses. We expect to be ready by the middle of the current financial year," Kumar told PTI in an interview.
Apart from wealth management and credit cards, the bank is also developing several new products aimed at enhancing non-interest income. Highlighting opportunities in the corporate banking space, Kumar said cash management services would play a key role in generating additional revenue. The product is currently under development and is expected to be launched by August.
"For corporate customers, cash management services are extremely important. We are also centralising our foreign exchange operations through Letter of Credit (LC) and Letter of Guarantee (LG) businesses, and we are strengthening our forex offerings as well," he said. Initially, the bank plans to target its existing corporate clients who currently avail these services from competing lenders.
"Today, we have the required technological platforms in place. This segment can become a significant source of fee-based and commission income. In addition, bancassurance is expected to contribute substantially to fee and commission earnings both this year and in the years ahead," Kumar added.
As part of its bancassurance strategy, the Mumbai-headquartered lender acquired a 25.18 per cent stake in a life insurance company and a 24.91 per cent stake in a general insurance company last year. Following the acquisitions, the entities were rebranded as Generali Central Life Insurance and Generali Central Insurance.
In August 2024, Central Bank of India had announced that it emerged as the successful bidder for the acquisition of Future Enterprises Ltd's (FEL) stake in its life and general insurance joint ventures. The bank was selected by the Committee of Creditors (CoC) as the successful bidder for the sale of Category 1 assets of the debt-ridden Future Enterprises in both life and non-life insurance businesses operated in partnership with Italy's Generali Group.
Meanwhile, the lender is also set to expand its international banking operations through the launch of an IFSC Banking Unit (IBU) at GIFT City in Gandhinagar, which is expected to become operational in the first week of next month. The bank has already appointed a branch head for the unit, and the groundwork required for commencement of operations is currently underway.
"We expect to open our IBU branch by the first week of next month. This will help the bank generate a substantial volume of foreign exchange business," Kumar said. Describing the move as a significant milestone in the bank's growth journey, Kumar said the new unit would support the expansion of its international banking business while enabling the lender to offer specialised financial services to customers.
According to him, the IBU will provide Central Bank of India with direct access to international financial markets and help it deliver a comprehensive range of products to corporate clients with foreign currency funding requirements.
The new unit will offer a wide range of services, including foreign currency loans, trade finance products, treasury and risk management solutions, as well as enhanced banking facilities designed to meet the evolving needs of its customers, Kumar added.