Uti Bank Board Loan Limit Rs 3,000 Cr

UTI Bank, the banking arm of the Unit Trust of India (UTI), has decided to fix the borrowing limit of its board of directors at a hefty Rs 3,000 crore.

The move is aimed at facilitating the large investments planned by the bank in expanding its branch network and in substantially increasing the number of its off-site ATMs.

The volume of the business of the bank has grown substantially, and is expected to show further robust growth. To meet the increased demand for funds to carry out these tasks , it has been felt necessary that the bank should have borrowing powers in excess of the paid-up capital and free reserves as existing at present.

 

The ceiling on borrowing of Rs 3,000 crore will be put up by the bank for shareholders' approval at its annual general meeting on May 30.

The bank's business plan for the year 2000-01 strives to seize new banking opportunities during the year and build on the growth of business seen in 1999-2000. The bank, therefore, expects to grow its branches, off-site ATMs and extension counters very rapidly and investments in information technology are expected to be very useful in attracting new business. Internet banking and e-commerce opportunities would be strongly exploited.

The bank's share capital stood at Rs 131.90 crore as March 31, 2000. As at the end of March, UTI Bank's capital adequacy ratio stood at 11.37 per cent (tier I capital 7.99 per cent and tier II capital 3.38 per cent). The bank had raised Rs 100 crore by issue of unsecured non-convertible redeemable subordinated bonds as its tier II capital in March 2000.

UTI Bank's deposits as at March 31, 2000 stood at Rs 5720 crore, up from Rs 3040.69 crore the previous fiscal. Advances, on the other hand, stood at Rs 3506.62 crore, up from Rs 2169.79 crore the previous year. The net profit was Rs 51.06 crore (Rs 31.08 crore).

The bank also took a number of initiatives on corporate governance recently. It has set up an audit committee for monitoring adherence to internal control systems and compliance with the regulatory authorities. An investment committee has also been set up for monitoring the investment portfolio.

These apart, the bank also has a committee of directors to take urgent operational decisions on behalf of the board within its delegated powers and a share committee to approve transfer of shares.