Allahabad Bank is widening the operations of its financial services subsidiary, AllBank Finance Ltd, which is at present limited to merchant banking and allied fee-based activities like distribution of mutual funds.

The company had recently inducted three independent directors — PK Gupta, former chairman and managing director of United Bank of India, D Sengupta, former chairman and managing director of General Insurance Corporation and RG Sharma, former chief executive officer, LIC Mutual Fund.

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AllBank Finance is also looking at strengthening its core team by inducting 8-10 professionals.

“The company was dormant for a while, but with the reconstitution of the board, we hope to bring professional management. The new board will discuss venturing into new business activities. Based on its recommendations, we hope to give a new shape to the organisation by the end of this financial year,” said a company official.

Established as a custodian of securities (documents pledged by clients of Allahabad Bank and held as collateral security against loans) under the name of Allahabad Bank Nominees Ltd, the company changed its name to AllBank Finance Ltd in 1991 and was registered with the Securities and Exchange Board of India as a category-I merchant banker. However, after 1995, the company remained non-functional for quite some time.

Later, the board decided to surrender its non-banking financial company (NBFC) licence to focus on merchant banking. Subsequently, the company 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’s. Last financial year, the company booked a profit of about Rs 2 crore.

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