Bank of Nova Scotia today announced plans for an offer to purchase a 4.99% minority stake in Bank of Punjab.

Bank of Punjab has a strong presence in India’s northern state of Punjab, as well as in the national capital region of Delhi and the neighboring state of Haryana.

The value of the offer is worth an approximate $7 million. Scotiabank says the size of the stake reflects the current maximum ownership permitted by local banking regulations, given its existing branch network.

“Our international strategy focuses on investing resources in high-potential markets where we anticipate solid, long-term economic growth and increasing demands for financial services,” said Robin Hibberd, senior vp, Asia-Pacific, Scotiabank.

With over 130 full-service, retail banking branches and commercial centers, plus specialized trade and foreign exchange units, Bank of Punjab has branches in several cities outside of northern India, including Mumbai. Bank of Punjab also has 210 automated banking machines and provides Internet banking services.

“Bank of Punjab is well positioned to take advantage of rapid industrial growth, as well as increasing consumer demand, and with this investment Scotiabank hopes to join Bank of Punjab in the exploration of joint business opportunities in the Indian market,” added Hibberd.

Scotiabank first expanded into India, opening a representative office in Mumbai, in 1982, providing commercial banking, treasury and trade services. The bank’s existing network of five branches in the cities of Mumbai, New Delhi, Coimbatore, Bangalore and Hyderabad will continue to support active banking relationships with major Indian and offshore multi-national customers.

“With the large and growing Canadian population of people from India, it is also expected that this association with Bank of Punjab will enhance retail and trade services for our Canadian customers,” said Hibberd.