United Bank of India, a public sector bank concentrated in north and north-east states of India is planning to ramp up its presence in north and south.
According to Deepak Narang, the Executive Director of United Bank of India, the bank plans to add 84 new branches across India in urban and semi-urban locations. He added that an approval for 34 branches has been sought by the Reserve Bank of India and rest were in the pipeline. Twenty branches would be opened in rural area for which permission was not required. Narang said that in the current situation of subdued economic growth and lackluster credit demand, the bank was aiming the retail sector to push the credit offtake.
“The segments like education loan, auto loan, SMEs and housing can be growth drivers. The demand for housing loan may be stagnant but taking cognizance of urbanization need of the country it can never drop. The real estate developers do not have a inventory holding capacity for long so the prices are bound to become flexible in times to come. Since our bank has a limited exposure of Rs 3000 cr to housing against the total bank advances of Rs 63,000 cr so we can quickly expand in housing.
The bank has 26 retail hubs pan India and the retail portfolio is well diversified, he added. The bank registered an increase in NPAs from 3.42% in quarter ending March 2012 to 3.47 % in quarter ending June 2012. According to Narang, the exposure of Bank to steel aviation sector was largely responsible for this as there were problems faced by these two sectors. “The provisions were to be made as Air India was also restructured by us.
But we are targeting a recovery of Rs 400 cr to Rs 500 cr this year” The bank is all set to open its representative office in Myanmar and it would be first representative office by any India public sector bank there.
All government approvals, according to Narang were acquired and only local authorities permissions were awaited to commence the operations. The bank has a representative office at Bangladesh.