The new hubs will be in place over three months and located across Chennai, Bhopal, Delhi, Kolkata, Mumbai and Lucknow. They will process personal, education and auto loans. At present, the retail segment accounts for 17 per cent of the bank's total advances of Rs 50,000 crore. Once the hubs become operational, they will increase credit contribution of the retail segment to 25 per cent by 2010, Allahabad Bank Executive Director J P Dua said.
The idea behind the hubs is to speed up processing the retail loans. At present, education loan disbursement takes 2-3 days, which will now be reduced to 24 hours. The bank has tied-up with 250 colleges across the country for receiving online applications for educational loans. Similarly, auto loans will be disbursed in two days compared to a week currently.
Elaborating on the plans related to the SBUs for selling third-party products such as insurance and mutual funds, Dua said, "We've identified 140 units within the bank, which will concentrate on improving fee-based income through selling insurance and mutual fund products. The bank aims to earn a commission of Rs 50 crore in 2008-09."
Allahabad Bank has tied up with Life Insurance Corporation (LIC), UTI Mutual Fund, Principal PNB, Kotak Mahindra Mutual Fund and Reliance Asset Management Limited.
Dua said Allahabad Bank has got licences to open 114 new branches across the country and most of them will be located in new suburbs, tier-II and tier-III cities.
He said that during the last financial year, the bank's total business grew by around 20 per cent to Rs 1.22 lakh crore over Rs 1.01 crore as on March 31, 2007. The bank has set a target of Rs 2 lakh crore by December 2010. "By March 2009, we aim to achieve a business of Rs 1.5 lakh crore," said Dua.
Deposits grew to Rs 71,600 crore in the last financial year (Rs 59,544 crore), while advances rose to Rs 50,300 crore (Rs 42,000 crore).
