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United Bank goes slow on Rs 50-crore public offer

Calcutta, Sept. 16: United Bank of India (UBI) has decided to go slow on its Rs 50 crore initial public offer (IPO).

Bank chairman and managing director Madhukar said, “We had earlier planned the IPO, but the 2002-03 results showed that our capital adequacy ratio increased to 15.17 per cent from 12.02 per cent in 2001-02. So, the bank’s board is currently taking a final look at the IPO.”

The tier-I capital alone provides around 12.63 per cent of the capital adequacy ratio.

Recently two Calcutta-based banks — Uco and Allahabad Bank — had floated their IPOs, which received an overwhelming response from retail investors as well as institutional investors.

Madhukar said, “The IPO market is good. But we have to see whether our bank needs any fresh capital at the moment. Our task is now to increase the bank’s business.”

The bank has taken a decision to reduce the tier-system to expedite credit lending.

It has decided to delegate more powers at all levels to speed up funds for borrowers. The bank targets Rs 1000 crore advances by December.

The powers at the branch levels have been doubled, Madhukar added.

The bank has created a special corporate business group to assess the credit proposals and take decisions.

A committee of general managers has also been formed to assist the corporate business group.

Madhukar said the decision whether to give credit would be settled within two weeks so that borrowers were not harassed unnecessarily.

The bank had given an advance of Rs 7,891 crore in 2002-03, which was a growth of 7.75 per cent over the corresponding period in the previous year.

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