Business Daily from THE HINDU group of publications
Tuesday, Jul 11, 2006
Business Daily from THE HINDU group of publications Tuesday, Jul 11, 2006 |
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Money & Banking
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Public Sector Banks Union Bank plans global foray Priya Nair
MR M.V. NAIR
Mumbai , July 10 Union Bank of India is drawing up a five-year growth plan with an eye on overseas opportunities. The bank currently has no overseas presence. Mr M.V. Nair, who took over as the Chairman of Union Bank in April, thinks the time is ripe for the bank to make a global foray. "Today many Indian companies are making overseas investments; they are either going for acquisition, or setting up new facilities with foreign partners. Similarly, India is emerging as a major market and many companies are coming to India. This will offer more global opportunities for bankers of these companies in India," said Mr Nair. Union Bank has permission from the Reserve Bank of India for opening branches in Doha and Hong Kong and for representative offices in Dubai and Shanghai. All these are under various stages of permission of the local authorities, in these countries. Besides these, the bank will explore presence in more Gulf countries and in China. "Two major factors to consider in case of global expansion are the regulation in those countries and the growth potential. But there is more scope for business overseas now, unlike earlier when the only business was from NRIs," he said. For the domestic market too, the bank has major plans for growth. Organic growth through subsidiaries could be a route the bank would be exploring. Currently , the bank has no subsidiary. Potential areas include credit card business, starting wealth management, and innovative approach in agricultural and rural lending. The bank may seek the help of a consultant to work out the future strategy. "Public sector banks have lost the mass affluent class in the last 10 years to private sector banks with regard to wealth management. Now we can match them in terms of technology, only our staff need to be retrained in selling," Mr Nair said.
New agri initiatives
Agriculture is the other area the bank is looking to expand and has targeted a 20 per cent growth this year as against 16 per cent last year. Some of the new initiatives planned in this sector include expanding knowledge village centres from the current 104 and offering doorstep banking through business facilitators in the rural areas. The other initiative is issuing of simple cards, white cards for the diary segment and general credit cards, with a maximum limit of Rs 25,000. "These are under different stages of development. Once they prove successful, we will go into rural business in an aggressive way," Mr Nair said.
More Stories on : Public Sector Banks | Farm credit
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