United Bank plans to open 12 branches

The United Bank of India on Tuesday said it was planning to open 12 new branches, including one each in Bangladesh and Burma.

UBI also announced that it has signed memoranda of understanding with L&T John Deere Pvt Limited and Eicher Tractors for financing tractors in West Bengal, Bihar, Orissa and the North Eastern states at a concessional rate of 9.5 per cent.

The bank was also in the process of entering car and consumer durable goods financing in a big way and was in talks with at least two car makers and one consumer goods maker for the purpose, Madhukar, chairman and managing director, UBI, told reporters in Kolkata.

Of the ten branches to be opened within the country, Madhukar said they would have one branch in Sikkim to position itself to take the advantage of opening up of Nathula Trade route and the rest would be in states like Himachal Pradesh and Kerala among others where it had got negligible presence with only one or two branches.

"It is for the first time in the last 15-20 years that UBI is going to open new branches. We have already got approval of the board for five branches and rest we, would get by December," he said.

About its tie-ups with tractor manufacturers, Madhukar said the MoU was signed on Monday. Both the producers were expected to sell about 1,000 tractors during the rest of the current fiscal in West Bengal, Bihar, Orissa and North East and "we are expecting to finance at least 500 of them."

Commenting on the performance of UBI, Madhukar said despite a slowdown in credit offtake till June this year, the bank was confident of increasing its credit portfolio by about Rs 2,000 crore (Rs 20 billion) by the end of the current financial year.

"Credit offtake was low upto June, but started improving from September and I expect that now onwards it will go up and we will end the fiscal with additional credit of Rs 2000 crore," he said.

He said their total credit as of March 2003 stood at Rs 6654 crore (Rs 66.54 billion) and dipped to Rs 5815 crore (Rs 58.15 billion) in August 2003, but in September it again rose to the level of March.

The CMD said the bank's corporate business group had already sanctioned a loan of Rs 500 crore (Rs 5 billion) for industrial and project finance and the disbursement would start from the beginning of the second half.

He said during the current year they had given major thrust in building up the retail credit portfolio which presently was around Rs 800 crore (Rs 8 billion) and they had set a target of reaching around Rs 1500 crore (Rs 15 billion) by March, 2004.

Meanwhile, the bank, in a bold initiative, has decided to re-lend the borrowers who had gone for one time settlement in the rural segment.

"Our board has given approval to re-lend borrowers in rural segment, who had gone for OTS after a gap of three months upto Rs 100,000. We would, however, not re-lend willful defaulters," he said.