The Hindu Business Line : UTI Bank may raise up to $1 b via MTNs

Mr U. K. Sinha (right), Managing Director & CEO, UTI Asset Management Company, and Mr P.J. NayaK, CMD, UTI Bank, at a press conference in Mumbai on Thursday. - - Shashi Ashiwal

Mumbai , Jan. 5

UTI Bank may raise up to $1 billion through medium term notes (MTNs) to fund its global operations, said Dr P.J. Nayak, Chairman and Managing Director.

The bank will open its Singapore branch by February, after which it will start the MTN programme.

"As we are opening a branch in Singapore we require funds and MTNs is an attractive option," he said. The notes could be raised in tranches, he added. The bank is in the process of getting ratings from Standard & Poor's and Moody's.

Dr Nayak said though the amount was notfinalised, initial estimates indicated the bank may need to raise up to $1 billion. The bank also plans to expand in other Asian countries as trade within Asia is growing and there is plenty of opportunity, Dr Nayak said.

For remittance business, the bank has tie-ups with Doha Bank in Qatar and UAE Exchange Company.

On domestic expansion, the bank is growing at a rate of one branch every two years, Dr Nayak said. Ruling out raising any equity capital, Dr Nayak said, "When we went in for a GDR issue in March 2005, we were clear that we would not need capital for a period of three years."

In tie-up with UTI Mutual: UTI Bank today announced a tie-up with UTI Mutual Fund to launch a facility for sale and redemption of mutual fund schemes through the bank's ATMs. This service allows UTI Bank customers to buy units of any of the UTI Mutual Fund schemes instantly and issue payment instructions online through the ATM. Customers can also redeem their mutual funds through ATMs.

This is part of the bank's efforts to provide third-party transactions through ATMs such as payment of telephone bills and insurance premia, mobile recharge, remittance to other banks' accounts through Visa card and so on. The bank has 1,820 ATMs spread across 236 cities. The bank will get a distribution fee for providing this service.

Mr U.K. Sinha, Managing Director and Chief Executive Officer, UTI Asset Management said, "Customers can also switch over from one mutual fund scheme to another through the ATM."

The asset management company also has tie-ups with ICICI Bank, Indian Overseas Bank, Bank of Baroda, Punjab National Bank, State Bank of India, Indian Bank and Kotak Mahindra Bank for distribution of mutual funds.