United Bank of India is keen to expand its presence in the western and the central parts of the country, UBI Managing Director & Chief Executive Officer Pawan Bajaj said. He said that banking industry expected to see better times from the June quarter next fiscal.
“Currently 60% of our branches are in the east and the north-east; we are keen to expand into other regions,” he said adding that the bank was eyeing a major branch expansion in 2017-18 and has already surveyed 200 branches. He was addressing the members of the MCC Chamber of Commerce & Industry.
“Of these, 100 are likely to be in this region” he said. In the current fiscal, UBI plans to open 51 branches, of which, about 15 have already been opened.
On the banking industry, he commented that banks were flush with funds but have not been able to find adequate avenues to deploy them. “It is servicing MSME and retail portfolios .. however their funds requirement are not huge.” The roads sector, he said, especially the BOT projects, have been “looking good for sometime now.”
Mr. Bajaj said of the funds that had been taken out of the system through the demonetisation of high-value currency notes, 30 per cent had been withdrawn. The remaining 70 per cent is with the banks in current and savings accounts (CASA), he said adding that, the cost of deposits had been in the range of 3.5 per cent to 3.75 per cent.
“The banking industry expects to see ‘better times’ from the June quarter, next fiscal and credit offtake may expand from March 2017, he said, adding “ the provisioning for sticky assets is almost over. And soon, the situation should improve for banks as a whole.”
Corporate lending remains an area of concern, according to Mr. Bajaj who said “only 20% of the recovery is from the corporate sector. And of this, the majority is from small accounts.”
On the various resolution systems now being put in place such as the Insolvency Code, he said that the banking industry would have to wait for the infrastructure to be put in place.
