Union Bank of India, is planning to submit a fresh capital raising plan to the Ministry of Finance “within a couple of days”.
According to Debabrata Sarkar, CMD, though the bank is currently well capitalised, it might have to raise capital to fund its growth needs beyond 2015.
“Our bank will be in a comfortable position in terms of capital till 2015. For the period post-2015, we will require more funds,” Sarkar said here on Friday. He was addressing an interactive session on bank credit organised by the Kolkata-based MCC Chamber of Commerce and Industry.
Meanwhile, he said, the bank witnessed good demand from the agriculture, retail and SME sectors, but demand from the corporate sector has been subdued.
Sarkar also pointed out that improper management of infrastructure projects in the country was hurting the financial stability of the banks. “For example, average maturity tenure of deposits for UBI is 1.7 years. But, an infrastructure project takes no less than 10 years. How can I match my asset and liability?” he asked.
Sarkar confirmed that the bank would not increase interest rates. “We have recently reduced our base rate to 10 per cent (from 10.25). We are not thinking of tinkering with the base rate now,” he said.
ayan.pramanik@thehindu.co.in
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.