Union Bank may raise $500 mn overseas

Union Bank of India is planning to raise $500 million through bonds by the end of this financial year to fund its global operations. The money would be raised under its medium-term note (MTN) programme from the overseas market by March.

"We might raise $500 million before March 2010 for overseas operation," Union Bank of India Chairman and Managing Director MV Nair told reporters after announcing implementation of 100 per cent core banking in two regional rural banks sponsored by it. He denied reports of the bank coming out with a follow-on public issue. "There is no proposal of FPO this fiscal,” he said.

As the credit offtake has been low, the bank has lowered its credit growth target for this year. "Originally we had kept a growth target of 25 per cent, but now we have lowered the projection for advances to 18 per cent from 25 per cent and deposits to 18 per cent," Nair said.

Asked about the Madhu Koda issue, he said the bank had reported all cash transactions above Rs 10 lakh to concerned authorities as per the prevalent regulations. The bank would audit its branches where high-level transactions happen.

The IT department, which had summoned Nair last Monday, has said that the bank did not furnish details of cash transactions worth more than Rs 10 lakh by Balaji Bullion Corporation and Balaji Bullion Bazar, two companies alleged to have helped the former Jharkhand Chief Minister Madhu Koda, who is at the centre of the Rs 4,000-crore money laundering scam.