“We have wanted to open the South Africa branch for a very long time but for some time we have not been getting approval and we wish to open another one in Durban,” Canara Bank’s chairperson and managing director Rajiv Kishore Dubey told CNBC Africa.
Canara Bank opened its first African branch in Johannesburg last Monday.
“Capital was one of the major challenges we faced but we are optimistic we will raise the required capital in India,” he added.
Responding to comments by Moody’s saying South African banks were facing an increase in bad loans due to rising interest rates and the prevalence of unsecured lending, Dubey noted that the country was not an exception.
“The environment is tough in London and in Hong Kong, the survival of any bank is determined by the resilience of an enterprise.”
“We are eyeing other markets also, we are looking for opportunities in the agriculture sector as we would like to lend to the agriculture sector factoring that the mining sector seems saturated.”
(READ MORE: India's investment interests in Africa sharpening)
Dubey added that Canara Bank would use its experience of lending in a huge agro economy like India to employ that in South Africa and other regional countries.
“In Africa we are looking into mining, agriculture and retail sectors with Kenya, Botswana, Mozambique and Rwanda [as our initial target countries], others will follow after we have done a full survey and analysis of the environment,” he said.
The Canara Bank is also earmarking the Brazilian and the Nigerian markets having approached the regulator in Brazil to open a subsidiary in Sao Paulo.
Dubey is positive that the company will withstand the challenges it might face in the region.
“There are always new challenges when you go to a new country, one needs to understand the psyche of the people and psyche of the government. If you are a law abiding and compliant bank I don’t think any challenge is big enough to be insurmountable.”
Canara Bank says positive relations between South Africa and India had partly influenced the bank’s move into South Africa.
(READ MORE: S.Africa's vodacom says talks for TATA's Neotel still on)
“At government level there is harmony and trade between the two countries is flourishing which is one of the reasons why we decided to come here.”
BY TRUST MATSILELE