The Hindu Business Line : Credit demand has dropped: Union Bank chief

Speaking to newspersons, he said the rising interest rates had not impacted the rural sector much and that big corporates were not totally dependent on banks for support, but the retail segment had started to feel the pinch.

Asked if the bank would pass on the benefit of a cut in risk-weight for home loan borrowers (for loans up to Rs 20 lakh), he said: "We will take a call on this, for we have kept the interest rate down by 50 basis points."

He added: "We had not increased the rate for our existing home loan borrowers even when we revised it upwards (twice) in the recent past."

On mergers and acquisitions, he said that it would be a good proposition, especially because Indian banks did not have the size to be a global bank.

According to him, the implications of the Basel norms would drive the need for mergers and acquisitions and capital requirement.

"We are positive on organic growth. Nevertheless, we will keep our eyes open should any proposal come our way."

On coming together with Bank of India, he said: "There are a lot of synergies between the two from working environment, syndication, technology platform and training systems, but it is a larger issue."

Union Bank of India is targeting growth of 24 per cent this fiscal by achieving total business volume of Rs 1,85,000 crore against Rs 1,48,000 crore last year.

Shanghai office

Union Bank of India's first foreign representative office is expected to become operational in Shanghai in May, said Mr Nair.

The bank has applied for a full branch licence at Hong Kong and Doha, both of which were pending before the regulator. "We have also applied for a licence for opening a representative office in Dubai, which is also pending clearance," Mr Nair said.

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