Patil vows to retain UWB's Marathi ethos

Maharashtra Finance Minister Jayant Patil on Friday strongly defended the state government's decision to put in a Rs 210 crore bid for the troubled Satara-based United Western Bank (UWB), saying, "We want to retain the bank's Marathi character."

Speaking to Business Standard, Patil said, "The state government has no intentions of running the bank on a day-to-day basis, as it does not have the experience. We have formed a consortium with professional organisations such as Housing Development Finance Corporation (HDFC), Infrastructure Development Finance Corporation (IDFC) and Sicom."

With Indiabulls also joining the fray, close to 12 entities have thrown in their hats to take over the bank. The list includes Canara Bank, Andhra Bank, Allahabad Bank, Corporation Bank, ICICI Bank, Federal Bank, IDBI Bank,Uco Bank, India Bulls and NSE stock broker Pradeep Bhavnani besides the state government-HDFC-IDFC-Sicom combine.

According to the minister, the state government will nominate only those people on the board who have banking experience and might consider withdrawing itself once the bank is safe.

The government of Maharashtra, along with its investment arm Sicom, HDFC and IDFC have put in a Rs 350 crore bid for the bank. While the state government will contribute Rs 210 crore, HDFC and IDFC together will contribute Rs 70 crore and Sicom will bring in another Rs 70 crore.

"UWB is serving the local population, especially those from the southern Maharashtra districts, since 1936. People from this region would not like to see the bank getting merged with any other bank of other regions," he said.

Patil also claimed that after the state government announced its bid for the bank, the instances of withdrawal of deposits by the public have substantially come down.

According to him, the state government's finances are in "good shape" and it has not overdrawn from the Reserve Bank of India for many years now.

"The rating of the state government-guaranteed bonds has been upgraded by agencies like Crisil and Icra," he pointed out.

"Even if there is no budgetary provision for this purpose, in case of an emergency like this, we can divert resources," he said.

Patil admitted that Sicom's mandate is different, but defended the government proposal of pumping money through Sicom, saying, "It already owns a stake in UWB and it has its nominees on the existing board."