Union Bank to get Rs 1,150 cr from gov by March 2011

"We hope to get the second tranche of Rs 1,150 crore as government capitalisation by March. This would help us to increase our tier I capital to 8.37 per cent from 7.9 per cent now," Union Bank chairman and managing director M V Nair said here on the sidelines of the launch of a new branch in Murshidabad district.

However, the bank added that in case of a delay in securing this fund, it will opt for tier-II capital funds.

"In case, the process is delayed then we have to take help of tier-II capital of around Rs 1000 crore during the year. We have total headroom of Rs 4500 crore," Nair said.

The cabinet has already approved the capitalisation plan of the bank, which received Rs 111 crore about four months back as first tranche of the approved Rs 1,261 crore infusion.

Nair said the bank was expecting a deposit growth of 20 per cent and credit growth of 23-24 per cent during the current fiscal.

"The total business target for the year is Rs 3.5 lakh crore by March," he added. Net interest margin of the bank is expected to remain between 3.10 and 3.20 per cent.

Besides, the bank will open 500 new branches in 2011-12, with its focus on east and north-eastern areas of the country.

Commenting on base rate, Nair said the bank had revised the rate to nine per cent with effect from today.

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