Union Bank to allot Rs 500 crore for agri co-op societies

Union Bank of India has set aside Rs 500 crore as first round funding for Andhra Pradesh under its financial inclusion programme.

Bank chairman and managing director MV Nair told the media here on Monday that this amount would be extended to 650 primary agricultural cooperative societies (PACS) over a period of time. The amount was Rs 20 crore for 20 PACS last year.

The disbursal of funds would be based on the credit record data being prepared by CoOptions Technologies. The Andhra Pradesh government has revived 2,700 PACS and closed down others.

The bank has also started in the state its biometric smart card-based intervention for disbursal of money under various government schemes. It has issued two million cards, which Nair said was a high number given that it has only 200 branches in the state.

He said the plans to raise $200 million in Swiss francs were on course, and the bank was expecting to close the issue in a month and a half. It has a full-fledged branch in Hong Kong and would open two new ones in Belgium and Dubai.

It has already received approval from the Reserve Bank of India for the Belgium branch and its application for a branch in the Dubai financial centre was only just made. Nair was speaking to reporters after opening the bank's new regional office here.

According to him, the bank would also launch its mutual fund business by December-end, and only then would it consider the wealth management vertical.

On the bank’s exposure to microfinance institutions, Nair said it had lent Rs 291 crore to 45 MFIs across the country, of which 15 MFIs were in AP, accounting for Rs 90 crore.

Describing the recent Andhra Pradesh ordinance on MFIs as a positive in the long-term, he said there was no proper regulation so far and the sector was still evolving. Once the Malegam committee submits its report, there would be more clarity on various issues, he said.