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First Capital Bank devours Bank of India

Publishing Date : 18 February, 2019

Author : TSAONE SEGAETSHO

First Capital Bank Botswana is moving to sweep out the footprints of Bank of India Botswana, by taking over its local business, following the Indian banker last year decision to shut down its local subsidiary. 


Bank of India Botswana was said to be among culprits contributing to the Indian born financial institution being dogged by “a sharp rise in non-performing assets (NPAs)” for almost two years since the last quarter of December 2017.  The operations in India, positive and negative, directly affect Bank of India’s subsidiaries including the one in Botswana. As if being marred by failure to compete financially and having ballooning NPAs due to worsening asset quality, the Reserve Bank of India (Indian central bank) has currently raised a red flag on Bank of India and other 10 private bankers by placing stern restrictions on them “not to issue any fresh loans and should hire new personnel.”


According to reports from the Asian country, the Indian central bank is imposing sanctions “as restrictions on couple to enforce certain restrictions on couple of more public sector lenders under the Prompt Corrective Action mechanism due to worsening asset quality and Bank of India has been failing to put down the red flag placed against it. 
 Last year’s reports said Bank of India will close three subsidiaries in Botswana, Uganda and New Zealand in a desperate move to salvage capital.


 According to reports Bank of India is selling its operations so that it can raise P500 million in capital which it can then use to shore up its domestic capital. Since setting its footprints in Botswana six years ago, Bank of India has managed to plough only on e branch cum head office in Botswana. Regarded as one of the top five banks in India is 113 years old and it was once state-owned entity before becoming nationalized in 1969.


First Capital Bank, the entity acquiring, has been ongoing a process of rebranding and seeks to grow according to its Botswana management.  Formerly Capital Bank, First Capital Bank has banking and finance operations in Botswana, Malawi, Mozambique, Zambia and Zimbabwe. It has four branches in Botswana and it will be clenching its claws on the two operations which are run by Bank of India.


First Capital Bank has so far proposed acquisition of 100 percent issued and paid up ordinary shares of Bank of India Botswana to Competition Authority of Botswana. The antitrust body is currently assessing to see if there arises any anti-competition practice in this acquisition.
“According to section 57(3), of the Competition Act, “any person, including a third party not a party to the proposed merger, may voluntarily submit to the inspector or the Authority any document, affidavit, statement or other relevant information in respect of a proposed merger”.


The Competition Authority therefore seeks any stakeholder views for or against the proposed merger, which may be sent within 10 days from date of this publication (12 February 2019),” said the Competition Authority. While investigating the acquisition, the Competition Authority has found that First Capital Bank is a company incorporated in accordance with the Laws of Botswana but controlled by First Capital Bank Plc Malawi; Everglades Holdings (Pty) Ltd, Botswana; Premier Capital Ltd, Mauritius; Prime Bank Ltd, Kenya; and members of the Anadkat Family.


“First Capital Bank Plc is a commercial bank registered in Malawi and listed on the Malawi Stock Exchange, with no other business interests in Botswana. Everglades Holdings (Pty) Ltd is an investment holding company wholly owned by Hemantkumar Kantilal Patel, a British citizen with other diverse business interests in Botswana, not within the banking sector. Prime Bank Ltd is a commercial bank registered in Kenya, with no other business interests in Botswana.


Premier Capital Mauritius Ltd is wholly owned by Hitesh Natwarial Anadkat (the non-executive Chairman of First Capital Bank plc Malawi) with no other business interests in Botswana. The Anadkat family being Hitesh N. Andakat’s wife and children holds British passports with no other business interests in Botswana,” says the local antitrust body. Competition Authority further states that First Capital Bank is a commercial bank, providing deposits, loans to corporates, individuals and Small Medium Micro Enterprises [SMMEs].


First Capital Bank operates a total of four branches and five loan centres across Botswana, specifically in Francistown, Gaborone, Kanye, Mochudi, Mogoditshane and Palapye, according to the antitrust body.  It further states that First Capital Bank has two subsidiaries: Diron Ridge (Pty) Ltd and Jetwig Enterprises (Pty) Ltd; both of which are not in operation.The Directors of FCBL are Hitesh N. Anadkat; Hemantkumar K. Patel; Stephen D. Pezarro (all British); Daniel Swabi, Judy N. Tsonope and Boitumelo K. Tibone (all Batswana), says Competition Authority.

The Directors of Bank of India Botswana, the entity targeted for acquisition by First Capital Bank, are Atanu K. Das; Uddalok Bhattacharya (both Indians); Naseem B. Lahri; Tlhopane N. Motsepe; Felicia B. January and Pauline Oreeditse Motswagae (all Batswana).

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