Bank of Bengal on comeback route

KOLKATA: After almost a year in hibernation, the Bank of Bengal project is set to be revived. However, due to the global recession, the institution would begin functioning as a non-banking financial company, West Bengal Industrial Development Corporation chairman Somnath Chatterjee said.
To attract funds for setting up the bank, the WBIDC is arranging an interview of chief minister Buddhadeb Bhattacharjee to be published in NRI-run newspapers in the USA."According to US law, we cannot directly appeal for US funds for the project. That is why we have decided to do so indirectly through a news item," Chatterjee said. The idea of the bank was mooted late last year at an investors'' meet in the city by management consultant Partha Sadhan Ghosh, a member of The Boston Pledge, a group of NRIs committed to improve the industrial atmosphere in the state.
However, lack of financial support was a major constraint. "According to Reserve Bank rules, a commercial bank needs to have a minimum base of Rs 200 crore as share capital. Since it would be difficult to get such a huge amount, we are thinking of beginning the venture as an NBFC," Chatterjee explained.
Nicco-Uco Finance, a subsidiary of the Kolkata-based Nicco Corporation, is considering picking up majority stake in the venture, being promoted by the WBIDC and TBP. Talks were still on with Nicco-Uco, Chatterjee informed.
The proposed bank would primarily finance local industries. The move came after the West Bengal government failed to convince nationalised banks to increase credit disbursement to the state''s industrial sector.
It is the equity participation by NRIs which still remains a stumbling block. "Recession has hit the economy hard, and thus funds are now not easily available," Chatterjee admitted.