Union Bank of India’s early estimate is that about 5-6% of its mortgage e book might bear restructuring underneath the Reserve Bank of India’s scheme, says govt director Manas Ranjan Biswal. In an interview with Mithun Dasgupta, Biswal says the Hybrid Annuity Model for freeway initiatives, photo voltaic and metropolis gasoline distribution and lease lease discounting are the areas the place alternatives exist to develop the financial institution’s company mortgage e book. Excerpts:
What form of development in advances are you anticipating for this fiscal, given the prevailing pandemic and quickly altering financial circumstances?
During the second half of the final (second) quarter, we noticed a great momentum within the variety of new liabilities and asset accounts being opened. With excessive frequency financial indicators exhibiting optimistic tendencies, Union Bank of India (UBI) is hopeful of registering 5-6 % development in credit score through the present fiscal. This must be supported by sustainability of agricultural credit score, current pick-up in retail and MSME sectors and sector-specific alternatives for lending to corporates.
Will the Reserve Bank of India’s on-tap TLTRO enhance general lending?
The not too long ago introduced TLTRO of Rs 1 lakh crore is yet one more step by the RBI to channelise liquidity in the direction of particular sectors. This window is obtainable for extending credit score in addition to by way of funding route. We count on credit score stream to extend additional underneath the not too long ago introduced TLTRO. However, we’re awaiting detailed tips on this regard.
In company section, what are the sectors do you are feeling may increase mortgage calls for?
There are sector-specific alternatives within the company section. For instance, there are initiatives from Hybrid Annuity Model (HAM) in street sector, photo voltaic and metropolis gasoline distribution in vitality sector. There are additionally alternatives in lease lease discounting. Moreover, corporates are additionally taking a look at consolidating their relationship with few banks which might be a great alternative for a big financial institution like ours.
For your financial institution, what may very well be the full dimension of loans that might come underneath restructuring?
First of all, I need to praise RBI for permitting “One Time Restructuring”. This measure will assist save immense enterprise worth that our monetary ecosystem has facilitated in recent times. Our early estimate is that about 5-6% of the mortgage e book might bear restructuring.
Do you count on retail mortgage development throughout this festive season?
Retail mortgage demand is coming again if we see the stream knowledge of previous few weeks. However, this is also a pent-up demand, and subsequently, we have to be careful for a few extra months. Nonetheless, UBI all the time brings festive delights for its clients. In the present yr too, we’re planning to launch a particular festive supply beginning mid-October. This will embody waiver and concession in costs and costs, particular supply for chosen set of consumers and mortgage segments.
Andhra Bank and Corporation Bank received amalgamated into Union Bank of India with impact from April 1, 2020. How has this merger helped your financial institution increase whole enterprise and capital base?
This amalgamation has doubled the size and dimension of the financial institution. And to present a perspective, the full enterprise of the amalgamated entity (as on June, 2020) was Rs 15.19 lakh crore with a buyer base of round 12 crore. The capital base has elevated to Rs 66,541 crore as of in the present day, which can usher the expansion in future.