| UTI Bank chairman and managing director P. J. Nayak in Calcutta on Thursday. A Telegraph picture
Calcutta, Nov. 20: UTI Bank is targeting both the overseas and the domestic rural market to grow.
The bank has received the Reserve Bank’s permission to set up its first office in Dubai. The approval from Central Bank of UAE is expected soon.
“We will open more branches in the Gulf countries in order to tap the NRI (non-resident Indian) business there. At present, the bank has NRI deposits of Rs 900 crore,” said chairman and managing director P. J. Nayak. Nayak was in the city to inaugurate a branch.
The bank’s foray into rural banking has been tuned with the overall recovery in the economy and good agricultural crops this fiscal.
“Rural India is emerging as a major financial power. We want to leverage this and also become an all-India bank. To begin with, we will set up branches in Ludhiana and West Godavari districts. We are also looking at Burdwan in West Bengal,” he said.
The bank, which has 214 branches, will add another 140 by March 2005.
Nayak ruled out the immediate possibility of divesting the government’s stake in the bank to enhance the capital base keeping pace with the growth in business.
“However, the government-owned UTI-I, the majority stakeholder in UTI Bank, will have to decide on the matter. But I personally feel that that we do not need more capital at the moment. Our capital adequacy ratio of 11.24 per cent is enough to meet the growth target,” said Nayak.
UTI-I holds 33.54 per cent in UTI Bank. LIC and GIC hold 13.53 per cent and 7.45 per cent, respectively. South Asia Regional Fund (7.73 per cent), CDC Financial Services (12.40 per cent) and Citicorp Banking Corporation (3.83 per cent), Chryscapital LLC (3.83 per cent) together hold 28.79 per cent in UTI Bank. The rest is held by the public, banks and mutual funds. The paid-up equity is Rs 230 crore.
The bank expects its deposits and advances to grow 25 per cent in 2003-04. The bank has adopted a 90-day norm for classification of assets from the first quarter of this fiscal.