The Hindu Business Line : United Bank to adopt FMCG pitch for education loans

Mr Parkash Singh, Chairman and Managing Director, United Bank of India (left); and Mr K.N. Prithviraj, Executive Director, at a press conference in Chennai on Thursday. - - Bijoy Ghosh

Chennai , April 8

UNITED Bank of India plans to get its officers to do "door-to-door" marketing of its retail loan products, particularly education loans.

The bank expects to have ended last year with an education loan portfolio of about Rs 30 crore but "we want to double it this year," Mr K.N. Prithviraj, Executive Director of the bank, said at a press conference here on Thursday.

While selling the education loan product, the bank officials will convey a straight message: loans at a simple interest rate of nine per cent, no collateral security up to Rs 4 lakh.

The bank's Chairman and Managing Director, Mr Parkash Singh, said that the bank wanted to see the retail portfolio increase to at least 13 per cent of total loans, against about 11 per cent now.

In the year ended March 31, 2003, United Bank's retail assets were of the order of Rs 613 crore. This, officials expect, would have grown to about Rs 940 crore last year. In the current year, the bank expects to see this increasing to Rs 1,500 crore.

The current year will be significant to the bank in another way — the accumulated losses would be completely wiped off. As at March 31, 2003, the bank had on its books old losses of about Rs 840 crore.

Answering a question, Mr Parkash Singh said that the bank had investments worth around Rs 14,000 crore, some 20 per cent higher than the statutory liquidity requirements. The bank intends to liquidate the excess investments to fund the growing advances.

He said that the bank intended to open branches in Bangladesh and Myanmar. United Bank has most of its branches in the States bordering these countries.

It wishes to capitalise on the geographic proximity and seek business in the growing trade between India and these countries.

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