The Hindu Business Line : ‘Credit demand picking up’

The growth in demand for credit was partly because of the slowdown on the external commercial borrowing front and poor liquidity proving a deterrent to large companies sourcing funds from the equity market, said Mr M.V. Nair, Chairman and Managing Director, Union Bank of India.

Addressing a press conference here, Mr Nair said that the Union Bank has crossed the threshold of Rs 2 lakh crore in business just a couple of days back. While deposits grew by 25 per cent on a year-on-year basis, advance posted a robust growth of 23 per cent.

Three-pronged strategy

The strident growth was backed by an 18-month project, which focused on technology, process and the people.

On the technology front, the bank was able to bring core-banking facilities to 1000 branches in the first five years. The pace was accelerated to bring the remaining 1500 branches under core-banking in just 4.5 months.

On the process front, centralisation has become a hallmark, leaving the branches to interact with the customers and develop business while centralising the daily closing of books and accounts.

The bank is now in the process of reducing the turnaround time for loan products.

If an education loan is not sanctioned within 48 hours of receiving all the relevant documents, the processing fees would be returned, Mr Nair said. This facility is being extended to a diverse range of loan products.

The focus on people is to impart better training to the employees.

As a result of the three-pronged strategy, there has been a spectacular rise in new business and new accounts opened with the bank.

Since the inflationary spiral seems to have tapered off and the monetary policies announced by the Reserve Bank of India seem to have taken root, Mr Nair said that interest rates might have hit their peaks and might ease in the months to come.

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