Union Bank expects capital infusion of Rs 280 cr from govt

MUMBAI: State-owned lender Union Bank of India on Monday said it is looking at capital infusion of Rs 250-280 crore from the government by the end of this fiscal.

"We are looking forward to the equity infusion of Rs 250-280 crore by the government, which will increase the stake of the latter to 58 per cent from 57.07 per cent at present," Chairman and Managing Director of the bank M V Nair told reporters on the sidelines of a function here.

Last week, Bank of Baroda too had said it would get Rs 775 crore capital infusion from the government in the March quarter.

Similarly, the nation's largest lender SBI is also expecting some Rs 4,000 crore from the government this fiscal, possibly through a rights issue.

Meanwhile, talking about Union Bank's decision to marginally reduce its benchmark lending rate by 0.1 per cent to 10.65 per cent even before the RBI deciding to ease the rates, Nair said, "We feel the overall interest rate is not expected to go up from now on."

On when does he see the rates easing, he said: "Our internal calculation says it should come down next financial year". Talking about non-performing assets, he said, "We expect the December quarter bad loan ratio below 3.25 per cent...By March, it should fall to below 3 per cent".

On the possibility of bank account portability, he said, the number portability is now available internally in some banks. "If technology supports it will be materialised, but it will take some time. It will give a high level of convenience to the customers," he added.

The bank shares were up over 2 per cent to Rs 173.05 on the BSE, whose main index closed 0.4 per cent higher in a choppy trade.

Source: EconomicTimes