Union Bank of India plans to raise ₹3,500 crore this fiscal to support its credit growth and provisioning requirements.
“Though the capital position is comfortable, we plan to raise some capital through QIP and have sought ₹1,750-crore infusion from the government,” said G Rajkiran Rai, Managing Director & Chief Executive Officer, Union Bank of India (UBI).
UBI is ready with a QIP plan and it will be executed based on the government’s capital infusion.
The bank plans 10 per cent credit growth this fiscal and there are provisioning requirements because of NCLT accounts, said Rai.
Retail, Agriculture and MSME which account for about 53 per cent will drive credit growth this fiscal. The bank is targeting to take it to 55 per cent in the next three years.
It will not shy away from lending to big corporates and is keen on lending to projects in the renewable power sector and hybrid annuity model projects in the road sector.
Rai also said the textile industry, which faced stress in the recent past, was creating jobs, particularly by medium level units, and the bank would lend to them.
In MSME loans, under the SME Saral concept, the bank has moved towards centralisation of sanctions by back offices instead of handling these at various branches. “This will quicken the process, and the quality of underwriting will improve,” he said.
UBI’s domestic business stood at ₹6,50,000 crore as of March 2017. The bank has set a target of taking this to ₹8,50,000-9,50,000 crore by 2020.
On the asset quality side, Rai admitted that slippages have not slowed down to expected levels. “Incremental slippages were coming more from strategic debt restructuring and other failures,” he said.