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Kolkata, Oct. 23

STUNG by a negative credit growth in the first quarter of the current financial year, United Bank of India has embarked upon a multi-pronged strategy to boost advances.

The strategy, launched in August, presupposes revision of loaning powers at all levels, constitution of a corporate business group to give thrust to big new accounts, sensitising branches particularly those in West Bengal and the North-East where the bank's largest number of branches are concentrated and across-the-board slashing of interest rates.

"The strategy has already yielded results", said Mr K N Prithviraj, Executive Director of UBI, while talking to Business Line. "At the end of the first quarter, our advances were lower by about Rs 900 crore as compared to March 31, 2003 but in the second quarter we succeeded in bridging the gap by Rs 300 crore."

The loaning powers had been enhanced from the level of a branch manager right up to the top. The corporate business group had been formed under a general manager assisted by four scale IV officers to process proposals of Rs 10 crore and above. Earlier regional managers used to recommend the proposals but not any more. In past two months, the total sanctions under the group amounted to Rs 600 crore, all new accounts.

Organising credit awareness programmes under the banner of credit camps was the key component of the branch sensitising drive. As many as 90 camps, held in various parts of West Bengal and North-East, sanctioned over Rs 300 crore of housing and other loans. The public response to the camps held even in the State's backward districts such as Bankura and Purulia was very good.

"The camps helped create awareness not only among the general public about the various schemes the bank has to offer but also among our own staff," he said. The agricultural loan up to Rs 50,000 was now available at 8.5 per cent rate of interest as against earlier nine per cent, he added.

Mr Prithviraj made it clear that the bank had no immediate plans to go for IPO, certainly not in the current fiscal. "With barely five months to go in the current fiscal, the time is too short", he said. Besides, the bank was not particularly hungry for additional capital. "With 15 per cent CRAR, we are capital fit," he said.

The reduction of the accumulated loss was the major concern of the bank. The loss had already been reduced from Rs 1,600 crore to Rs 800 crore but further reduction was needed. "More than increasing the size of the balance sheet, we are interested in achieving growth through quality improvement," Mr Prithviraj added.

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