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United Bank of India offering VRS from Jan 1 to 31

Our Bureau

CALCUTTA, Dec. 24

UNITED Bank of India (UBI) will introduce a voluntary retirement scheme for all sections of its employees (except specialists) on January 1, 2001. Applications for VRS will be received till January 31.

Mr Biswajit Choudhuri, Chairman and Managing Director of UBI, told newspersons here on the occasion of the bank's Golden Jubilee celebration that an estimated 10 to 12 per cent of the total workforce of about 21,000 might opt for VRS. This would cost the bank over Rs 200 crore to be spread over five years.

The funding of VRS, Mr Choudhuri conceded, had not yet been finalised. ``We have asked the Union Government for help'', he said pointing out that the Government might bear part of the interest cost of the loans to be raised to fund VRS. ``A firm commitme nt from the Government in this regard is still awaited'', he said. The delay in receiving the Government help would hit the bank's bottomline, he observed.

UBI was expecting a net profit of Rs 46 crore in 2000-01 against Rs 31 crore in 1999-2000, he said. In view of the improved performance in the past four years, the bank might approach the Government for the waiver of the two-year moratorium the Governmen t had declared on the payment of arrears to the employees in respect of three banks, including UBI. The arrear payment would cost the bank around Rs 70 crore.

UBI also sought the Government assistance by way of capital support of Rs 300 crore for the current fiscal and to expedite technical upgradation programme estimated to cost Rs 180 crore over a few years. Depending on the extent of Government's capital su pport, the bank may go for Tier-II capital to meet the capital adequacy stipulation.

Between April and November, its operating profit amounted to Rs 81 crore against Rs 21 crore in the same period of the previous fiscal. Total deposits crossed Rs 18,000 crore posting a growth of 15.5 per cent on year to year (YoY) basis, and advances to Rs 6,500 crore or a growth of 24.4 per cent (YoY). Net NPA ratio reduced to 9.6 per cent from 12.7 per cent in March 2000 and the gross NPAs to 22.8 per cent from 27.6 per cent during the same period.

Recounting the bank's history, the CMD pointed out that UBI came into being on December 18, 1950, with the amalgamation of four banks, namely, Comilla Banking Corporation Ltd, (Estd in 1914), Bengal Central Bank Ltd (1918), Comilla Union Bank Ltd (1922) and Hooghly Bank Ltd (1932).

The year-long Golden Jubilee celebrations were kicked off here by Dr Asim Dasgupta, West Bengal Finance Minister. In January, the Union Minister of State for Finance in charge of Banking, Mr B V Patil, will attend a function. Also, there would be custome rs' meets, both for individual and corporate customers, all over the country. As Mr Choudhuri pointed out, some of the country's leading companies such as East India Hotels, Bennett Coleman, Williamson Magor, the TVS group had remained with the bank for many years.