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Shobha Kannan

Kolkata, May 18 United Bank of India plans to realign its rate of interests on advances, which are below the prime lending rate, in order to get a better yield from advances.

Mr T.M. Bhasin, Executive Director of the bank, told Business Line: “Some of our advances are below PLR. Now we want to realign them in a way to increase our yield on advances.” The bank plans to release some money from its investments and allocate it to the retail and small and medium enterprises in order to get better returns. “We plan to release close to 3 per cent of the money from investments in order to boost the credit-deposit ratio,” Mr Bhasin said.

The bank is targeting a 25 per cent growth in advances and 20 per cent growth in deposits in 2008-09. Mr Bhasin said that the bank would focus on the SME and SSI segments as they ensure better returns.

The bank’s retail portfolio stands at Rs 7,158 crore and it plans to increase it by 30 per cent during the current financial year. “We will lay greater emphasis on the SME, SSI and agricultural segments this year,” he said.

UBI plans to recover Rs 500 crore from its written-off accounts and non-performing assets (NPA) portfolio. “In 2007-08, we recovered about Rs 427 crore. This year (2008-09) we want to recover about Rs 500 crore,” he said. The bank has been organising recovery camps in various regions for the same.

The net NPA of the bank declined to 1.1 per cent (1.50 per cent) in 2007-08.

The bank has slashed the rate of interest on housing loans by 25 basis points after the announcement of the reduction in risk weightage on home loans of up to Rs 30 lakh (Rs 20 lakh) to 50 per cent, by the Reserve Bank of India in the annual Credit Policy for 2008. “There is an increase in demand for housing loan in the eastern region and we want to tap the market,” Mr Bhasin said.

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