The Hindu Business Line : Union Bank has cushion against bond hits

Mr V. Leeladhar (left), CMD, Union Bank of India, with Mr K. Rathanakar Hegde, Executive Director, at a press conference in Mumbai on Wednesday. - - Shashi Ashiwal

Mumbai , Sept. 15

UNION Bank of India may not be transferring a portion of its SLR securities to the Held to Maturity Portfolio in the immediate future, according to Mr Ratnakar Hegde, Executive Director, Union Bank.

Speaking to press persons on the sidelines of the launch of the bank's "multi-city cheque" facility here on Wednesday, Mr Hegde said, the bank has a sufficient cushion of `unrealised gains' which along with the investment fluctuation reserve, would help it withstand another 1 per cent to 2.5 per cent rise in interest rates.

Mr Hegde said, "In the near term we don't expect rates to go up. Now that RBI has taken the measure of hiking the CRR, there may not be any other immediate measures until the Credit Policy."

Union Bank of India has achieved disbursements of close to Rs 600 crore in the second quarter of this fiscal, Mr Hegde said. "In the first quarter we achieved around Rs 590 crore and in the second quarter too, we have disbursed around this much," he said.

Highlighting the pick-up in bank credit in this financial year, Mr Hegde said, "In the last 5 years normally around the first quarter there has always been negative credit growth. In the current year, there was a 20-per cent pick-up in credit growth on an annualised basis."

As part of its ongoing retail initiatives, the bank has unveiled `multi-city cheque" facility for its customers whereby they can make payments in other cities through multi-city cheques without having to approach the branches. The facility is expected to expedite the bank's intra-city cheque clearings.

These cheque books have been issued for the benefit of the bank's core-banking services branch customers and will enable them to make their payments in 17 cities and this will be gradually extended to other centres.