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| Allahabad Bank to restructure its subsidiary AllBank Finance |
| Namrata Acharya / Kolkata Sep 03, 2009, 00:11 IST |
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Allahabad Bank is restructuring its financial services subsidiary, AllBank Finance Ltd, to widen its operations, currently limited to merchant banking services and allied fee-based activities like distribution of mutual funds.
The company had recently inducted three new independent directors, which include P K Gupta, former chairman and managing director, United Bank of India, D Sengupta, former chairman and managing director of General Insurance Corporation (GIC) and R G Sharma, former chief executive officer, LIC Mutual Fund.
The current board of the company would deliberate on new business activities like broking, trusteeship and depository services, particularly pertaining to the bond market, among other verticals, said sources.
This apart, AllBank Finance is also looking at strengthening its core team by inducting about 8-10 professionals.
“The company was initially lying dormant, but with the reconstitution of the board we hope to bring professional management to the business. The new board will discuss venturing into new business activities, and based on their recommendations, we hope to give a new shape to the organisation by the end of this financial year,” said a company official.
Initially established as a custodian of securities (documents pledged by the clients of Allahabad Bank and held as collateral security against loans granted), under the name of Allahabad Bank Nominees Limited, the company changed its name to “AllBank Finance Limited” in 1991 and was registered with SEBI as Category I Merchant Banker.
However, after 1995, the functions of the company were substantially subdued, and it remained non-functional for quite some time.
Later, the board of the company decided to surrender its non-banking financial company (NBFC) licence, to focus more on merchant banking business. Subsequently, the company had also transferred a part of the paid-up capital to the bank, as being a financial sector subsidiary its capital requirement was less than an NBFC. Last financial year, the company had booked a profit of about Rs 2 crore.
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