Indian Overseas Bank Logo

Indian Banks: The Story of Indian Overseas Bank (IOB)

Indian Overseas Bank (IOB) History

Indian Overseas Bank (IOB) was founded on February 10th 1937, by Shri.M.Ct.M. Chidambaram Chettyar. MCt., as he was popularly known, was pioneer in many fields – Banking, Insurance and Industry. IOB was founded with the twin objectives of specialising in foreign exchange business and overseas banking. Beginning with United India Life Insurance, he ventured into general insurance in the form of United India Fire and General Insurance Company Ltd., and then the successful bank   — the Indian Overseas Bank. He also set up Travancore Rayons, India’s first synthetic fibre unit, in Kerala.

A little background:

Indian Bank, funded by Chettiar capital, was formed after the infamous Arthurbot crash. M.Ct. Muthiah Chettiar became a director of the bank in 1914 and remained one till his death when his son MCt succeeded him in 1930 and served on the board till 1940 and then again from 1945 to 1949 when his son, M.Ct. Muthiah, became a director. Differences of opinion with the board led to Muthiah quitting it in 1950. With that ended the MCt family’s association with helping steer the Indian Bank.

By the middle of the 19th century, Chettiar capital started migrating to Ceylon, Burma and further east, to expand their business in commodity trading. But while the Chettiars were active in South and Southeast Asia during this period banking facilities in their homeland, South India, continued to be inadequate.

The Indian Overseas Bank, though thought of by some as a `Chettiar bank’, adopted from its very inception an approach quite different to the Indian Bank’s in matters of business, customers and staffing. Not only did it see helping Indians overseas as a priority, but at home it began to look at India’s growing industrial sector, in which Chettiars had played only a small role, as an area where its presence should be. Indian Overseas Bank commenced operations simultaneously in Madras, Karaikudi, the chief town of Chettinad, and Rangoon on February 10, 1937.

It was the bank that put the country’s name on the map of banking in the Far East, lending assistance and prestige to hundreds and thousands of Indians abroad. In 1969, 15 years after MCt’s death, IOB became one of the youngest among the 14 banks nationalised.

Indian Overseas Bank Logo
Indian Overseas Bank Logo

 

Indian Overseas Bank founder M.Ct.M. Chidambaram Chettyar
Indian Overseas Bank founder M.Ct.M. Chidambaram Chettyar
Indian Overseas Bank - Cheque
Notice the old logo?

In 1973, IOB had to wind up its five Malaysian branches as the Banking law in Malaysia prohibited operation of foreign Government owned banks. This led to creation of United Asian Bank Berhad in which IOB had 16.67% of the paid up capital. In the same year Bharat Overseas Bank Ltd was created in India with 30% equity participation from IOB to take over IOB’s branch at Bangkok in Thailand. BhOB was merged with IOB in 2005. BhOB is owned by seven banks, including Indian Overseas Bank (30%). The others are The Bank of Rajasthan (16%), Vysya Bank (14.66%), Federal Bank (10.67%), Karur Vysya Bank (10%), South Indian Bank (10%) and Karnataka Bank (8.67%).

Bharat Overseas Bank logo
Bharat Overseas Bank logo

Tagline: Good people to grow with