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Our Bureau

Mumbai April 17 UTI Bank's board has not decided on a new chairman and managing director for the bank.

The RBI had denied approval for the re-appointment of Dr P.J. Nayak, Chairman and Managing Director, UTI Bank, whose term ends on July 31.

The central bank has proposed a split in the office of Chairman and Managing Director in line with the recommendations of the Dr Ganguly Group Report on Corporate Governance. The RBI has sought a revised proposal from the bank on whether Mr Nayak should be reappointed either as Chairman or as Managing Director.

Mr Nayak has informed the RBI and the Remuneration and Nomination Committee of the board of the bank that it would not be possible for him to function in a "different and lesser capacity" and, therefore, cease to be associated with the bank after his current term with the bank expires.

Mr R. Asok Kumar, Executive Director, UTI Bank, said, "No decision has been taken as of now but the board is likely to discuss the issue on June 1 ahead of the bank's annual general meeting."

UTI Bank has recorded over 39 per cent increase in net profit. Retail advances of the bank have jumped by 38 per cent to Rs 8,928 crore from Rs 6,490 crore as at end March. Retail advances now account for 24 per cent of the total advances of the bank while home loans contribute about 54 per cent to the retail assets.

"There has been a slight slowdown in demand for home loans but since we are not a leading player in the area we have not seen much impact on our retail portfolio," he said.

The average cost of funds was 5.92 per cent against 5.08 per cent in the corresponding quarter the previous year. UTI Bank's PLR stands at 15 per cent.

Other income also showed an increase on gains from securities' transactions, commission earned from guarantees or letters of credit, fees earned from providing services to customers, selling of third party products and ATM sharing fees.

The bank has a capital adequacy ratio of 11.57 per cent. Net NPAs of the bank was at 0.61 per cent. The board of directors has recommended a dividend of 45 per cent.

The bank has 561 branches and extension counters and 2,341 ATMs. The bank is planning to approach the RBI shortly for opening 125 branches.

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