Kolkata, June 15
THE Allahabad Bank board has okayed the first model for diversification by Allbank Finance, the bank's 100 per cent subsidiary, which is being given a new lease of life.
The company, which had earlier surrendered its NBFC licence to the Reserve Bank of India (RBI), has applied to the Securities and Exchange Board of India (SEBI) for starting merchant banking and underwriting activities. The latter will constitute the core of its new-look business profile.
Allbank Finance is now likely to enter insurance broking after a fresh round of capitalisation, said Mr O.N. Singh, Chairman and Managing Director of Allahabad Bank. He added that insurance broking, given the trends witnessed in the insurance sector, would be a serious business for the company.
He was talking to newspersons after addressing the bank's third AGM on Wednesday.
The board had earlier decided that Allbank Finance would not be amalgamated with the parent outfit. Instead, various business strategies were considered - a move that has finally led it to apply for a merchant banking licence.
"By next year, some exciting developments concerning the subsidiary will be made known," he said.
Shareholders were told that consolidation did not necessarily mean that Allahabad Bank would be a takeover target for another party.
It has identified the southern region as one that is full of potential. Part of its expansion plans will be oriented towards the southern market.
The board, meanwhile, is prepared to recognise employees who help recover NPAs.
It has also paved the way for a new HR policy, which will be put in place in about a year. IIM Calcutta, IIM Ahmedabad, and XLRI Jamshedpur have been mandated as HR consultants.
Allahabad Bank, Mr Singh said, has projected a business of Rs 80,000 crore, to be reached by March next year.
Total deposits are expected to go up by 25.1 per cent to Rs 51,000 crore or so, while gross credit is slated to increase by 30.9 per cent to about Rs 29,000 crore.