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United Bank puts off public float plan

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Debjoy Sengupta Kolkata
Last Updated : Feb 06 2013 | 6:37 PM IST
United Bank of India (UBI) has shelved its plan to float a Rs 100 crore initial public offer (IPO).
 
Partap Singh, the new chairman of UBI, said the bank did not intend to float an IPO since its capital adequacy ratio is more than comfortable at 16 per cent.
 
"At 16 per cent CAR, the bank does not want to approach the capital market. We at present want to create more assets at this adequacy. We are comfortably placed to pursue our business plans with the same level of capital that we have," he said.
 
Singh also said, "We have no intentions of raising Tier-II in the immediate future. But a few months down the line we will consider raising some amount of Tier-II."
 
The bank under the chairmanship of Madhukar, who retired a couple of months back, had decided to float an IPO to raise Rs 100 crore. The new chairman, however, thinks it is not the appropriate time and wants to concentrate on increasing the business of the bank in the next couple of years.
 
On the credit offtake front, UBI has targeted Rs 2,000 crore this year against Rs 900 crore achieved in the first half of 2003-04.
 
Meanwhile, UBI has in a bid to enhance credit flow to the rural sector, has tied up with Eicher Motors and Larsen & Toubro to finance equipment and farm vehicles.
 
The company has also entered into talks with two consumer durables and three passenger car manufacturers for providing finance at concessional rates.
 
Under the scheme of arrangements with L&T and Eicher, UBI will provide finance at competitive rates to farmers for purchasing tractors and tractor-trailers from both the companies.
 
UBI hopes to finance at least 50 per cent of the vehicles and equipment sold by these two companies.
 
Under the tie-up, the company through its dealers will provide a commitment that the vehicle financed through UBI will be repaired within seven days in case there is a breakdown.
 
In the event of a delay, UBI will forgo interest for each day of delay in repairing the vehicle. Under the scheme, dealers will also have a margin on interest and they will be allowed to pass it on to consumers.
 
Meanwhile, UBI has also firmed up plans of opening 10 more branches. The first one would be setup in Sikkim. It was also planning to open two foreign branches one each in Bangladesh and Burmah.
 
The bank was also contemplating expansion of banking activities in Sikkim and hoped to grab a considerable portion of banking opportunities that now exist in the Nathulla pass region.

 
 

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First Published: Apr 03 2004 | 12:00 AM IST

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