Retail sector to be Union Bank's focus under new CMD

MUMBAI: Union Bank of India will focus on lending to retail sector and aim at improving customer service in a bid to retain and lure clients, new chairman and managing director Debabrata Sarkar has said.

Sarkar, who was earlier the executive director of Allahabad Bank, took charge as the chief of Union Bank after MV Nair retired on March 31.

The bank should focus on lending to farmers, small businessmen, and retail sector, Sarkar said addressing senior officers of the bank. He said the bank's ratio of retail advances is very low given its large branch network and strong delivery channel and technology platform.

Currently, the bank's retail advances portfolio stands at nearly Rs 16,000 crore, which is little less than 10% of its total loan book. This compares with an average 20%-25% retail portfolio of other lenders.

"Every Indian has aspiration to own a car and house and we should look at converting these aspirations into business," he said. The bank has more than 3,200 branches and 3,800 ATMs, and its total business - advances and deposits - touched 4 lakh crore as on March 31.

He also stressed on the need to focus on customer services, which would enable the bank to increase its customer base. The bank should also focus on recovery of bad loans and rigorously monitor all loan accounts to prevent them from slipping into bad loan category, he said.

As on March 31, the bank's gross non-performing assets stood at 3.33%, while net NPA was 1.88% of total advances.

Allahabad Bank has announced that Tilak Raj Chawla will replace Sarkar as executive director. Chawla started his career in 1977 with Punjab National Bank. In 1996, he joined Dena Bank as assistant general manager and was gradually promoted to the post of chief general manager in July 2011.