Public sector lender Union Bank of India will raise Rs 1,386 crore worth capital in the second quarter starting June 2014, according to Arun Tiwari, Chairman and Managing Director of the bank.
The bank will raise funds through qualified institutional placement (QIP) issue, which involves issue of equity shares, fully and partly convertible debentures, or any securities other than warrants which are convertible to equity shares, to a qualified institutional buyer (QIB).
Tiwari hinted that the market conditions seem more favourable post elections with a stable government at the Centre. “What we read everyday shows that sentiments have improved. We expect the QIP to take place starting July,” Tiwari said after he launched the tablet banking initiative.
The amount of Rs 1,386 crore will increase the capital adequacy ratio by 50 basis points, the Chairman added. A basis point is 0.01 percentage point.
As on March 31, 2014, the state-owned bank’s capital adequacy ratio of the bank, under Basel III, is 10.80 per cent with a Tier-I ratio of 7.54 per cent.
MTN programme
The bank also raised $350 million in April by selling offshore bonds as a part of its medium-term note or MTN programme.
Moreover, Dena Bank plans to raise around Rs 570 crore, Indian Overseas Bank had got the board approval to raise Rs 350 crore last December, and IDBI Bank, which also plans to raise funds by selling shares through QIP, will go to the market post June, according to agency reports.
Experts suggest the market condition this fiscal will be better than last year, valuation of shares of banks are still below their book value and if they plan it now, the issue will be much more diluted.
Tabulous Banking
Union Bank’s ‘Tabulous Banking’, a tablet based Savings Bank account opening process within 24 hours at the desired branch opened on Saturday as a pilot in 7 locations - Ahmedabad, Bangalore, Chennai, Kolkata, Lucknow, Mumbai and New Delhi and will be rolled to other locations in a phased manner.
Under this facility, a customer willing to open an account shall give a missed call to 922-300-9696 and one of the 40 officers in the bank deployed to cater to this initiative will attend the customer. The officer calls the customer and fixes the appointment, visits the customer’s place at the scheduled date & time. The officer feeds the customer’s details into the tablet, clicks photograph, takes the snapshot of the original KYC documents and uploads it.
The officer then hands over the Welcome Kit to the customer. The officer also gives a demo about the self user creation of Internet banking and U-Mobile applications. The tablets are equipped with 3G connectivity through which the data is loaded on the Bank’s server and the customer gets an auto SMS informing him/her about the account number, the bank said.