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UTI Bank follows peers, to branch out abroad

George Smith Alexander

After Bank of Punjab, ICICI Bank and HDFC Bank, it's now the turn of UTI Bank to set up its overseas operations. The bank is looking at setting up a representative office in Dubai by the second half of this year.

P J Nayak, chairman and managing director, UTI Bank, said: "We are looking at setting up a representative office in Dubai by the second half of this financial year once we get the clearance from the regulators in both countries. There is a lot of potential for business from this region and we are also signing alliances with exchange trading firms there. We are looking at deposits and remittances which come in through these firms. In due course, we will also tie up with firms in other countries in the Gulf."

Nayak added: "We are looking at the US and the UK markets. However, every thing is at a preliminary stage. We may appoint a consultant to undertake a study on the potential of the market."

The consultant will look at the business opportunities available for the bank, profitability and other issues. UTI Bank will shortly be approaching the RBI for regulatory approval.

ICICI Bank and HDFC Bank are also looking at setting up their representative offices in Dubai, while Bank of Punjab has already opened a representative office in Toronto, Canada.

The bank had started an NRI cell in October last year, headed by senior vice-president Vinod George. According to George: "Though the expat population in Dubai is not as large as in some of the other countries such as Australia, Canada, etc, remittances of around Rs 125 billion annually come from this market to India. Of this, a major chunk goes to the public sector banks. A bulk of the NRI deposits of around 30 per cent is accounted by Maharashtra, 17 per cent by Kerala, 13 per cent by Gujarat and Punjab 7 per cent," Nayak said.

To tap the NRI market, the bank is strengthening its presence in Maharashtra, Kerala, Gujarat and Punjab through a network of branches and ATMs.

The bank will also tap the other Gulf countries through alliances with the exchange trading companies.

The NRI deposits for the bank for the year ended March 31,2002, was at around Rs 6 billion out of the total deposit base of around Rs 120 billion. However, Nayak said, the NRI deposit base had gone up by around 22 per cent in the last fiscal.

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