United Bank of India chairman P.K. Gupta (left) with Merchants’ Chamber of Commerce president Santosh Saraf in Calcutta on Wednesday. Picture by Kishor Roy Chowdhury

Calcutta, May 24: The United Bank of India is all set to shake off its “Bengal bank” image and have a pan-India look. Its morale was boosted with the cabinet approval to write off an accumulated loss of Rs 278.44 crore against the capital and come out with a clean balance sheet.

“We will focus on increasing our presence in the northern, central, southern and western parts of the country. So far, we have been concentrating and confining ourselves in the eastern and north-eastern states,” said UBI chairman P.K. Gupta while addressing an interactive session organised by the Merchants’ Chamber of Commerce here today.

According to Gupta, the bank has approached the Reserve Bank for permission to open 150 branches in the next three years.

“We will open 50 new branches in 2006-07. Of this, 26 will be in the northern states, nine in central India, six each in the south and west. In the east, we will open only three new branches this fiscal.”

Last fiscal, the bank opened 10 new branches taking the total number to 1,318.

United Bank of India also envisages to become tech-savvy by 2008 so that 80 per cent of its business is done through CBS (core banking solution) branches.

“Our pilot CBS branch will go live from September and by the year-end we plan to implement CBS in 15 branches. The number will go up to 55 by March 2007 and by the end of 2007-08, 600 branches will have CBS carrying out 80 per cent of our total business,” Gupta said.

The bank will spend Rs 160 crore towards technology upgradation. It has hired Hewlett & Packard for system integration and Infosys for providing the software solution.

United Bank of India will install 80 automated teller machines this fiscal, taking the total number of ATMs to 200. It will also start offering Internet banking from June.

UBI, which reported a 34.8 per cent growth in advances at Rs 15,963 crore in 2005-06, expects that its lending in 2006-07 will grow 31.5 per cent at Rs 21,000 crore. “However, a credit growth beyond 28 per cent will not be comfortable for us,” Gupta said.

“Though we have a capital adequacy ratio of 13.12 per cent, it would have been be 10.87 per cent if we had to implement the Basel II standards from March 2006,” he added.

“If advances grow by 25-28 per cent, we will not need additional capital before March 2007 (the date stipulated for Basel II implementation),” said a UBI official.

UBI is currently talking to 3-4 merchant bankers on capital restructuring.

After writing off the accumulated loss, the bank’s capital base stands at Rs 1,532.43 crore. UBI will have to pay back Rs 700 crore equity to the government, which holds a 100 per cent stake in the bank.

Of the remaining Rs 832.43 crore capital, the bank may convert a portion as preference capital of the government.