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United Bank of India to double remittance business

ABU DHABI—Union Bank of India (UBI) proposes to almost double its share of remittance business from the GCC countries within the next two years, the bank Executive Director, S.C. Kalia 
has said.

“Our present volume of remittance from the GCC countries is about Rs 2.5 billion (about Dh 1950 million) per annum, and this will be roughly 2.8 per cent of the total remittances from the GCC countries to India. Our aim is to hike it to five per cent in the next two years”, Kalia who was on a business visit to the UAE told Khaleej Times here.

“We have a representative office in Abu Dhabi, and that is the only such office in the whole of the GCC. But we have tie-ups with 22 exchange houses in the region to facilitate the remittance business. Out of them two are in Bahrain, three in Oman, four in Kuwait and three in Qatar, as well as nine in the UAE. In Saudi Arabia we have a tie-up with a bank”, Kalia said.

“We are pursuing our efforts to start a full-fledged branch in the UAE, and will open one as soon as the regulators here give us the permission”, he said.

“We have two representative offices in China, one Australia and a ful-fledged branch in Singapore. With a network of 2815 branches and 3200 ATM counters we have over 5200 touch points across India. Our total business in the last financial year ended on March 31, 2010 was Rs2910 billion (Dh227.34 billion) and we want to raise it to Rs3600 billion (Dh281.25 billion) by the end of the current fiscal”, he said in reply to a question.

He conceded that the current level of inflation in India was a cause of concern. The current inflation level is over 10 per cent, but the Reserve Bank of India (RBI) has set a target to reduce it to five per cent by the end of the current financial year ending on March 31, 2011.

“This target is feasible considering that monsoon appears to be favourable this year and we a good agriculture production because of that. This increase in crop will ease the supply side constraints and will lead to dip in prices of food and other essential commodities. This in turn will offset even the adverse impact of the rise in oil prices as well,’’ the UBI official argued. According to him the banks in India did face a liquidity crunch in the last couple of months after the auction of the telecommunication sector for 3G and Broadband networks. The money that has been taken out of the system will come back in a couple of months through government spending other means, which will ease the liquidity of the banks.

Pointing out that the high growth rates that India is set to achieve even in these troubled periods will make the country a favourite portfolio investment destination for the foreign institutional investors .

“They (the FIIs) will not get such high returns they will get in India in most of the other countries which are facing deflationary pressures. Barring China none of the major economies are set to achieve such high growth rates. The IMF has forecast 9.5 per cent GDP growth rate for India, while our own forecast is between eight and 8.5 per cent. Once the FIIs start investing heavily in India, the rupee will also appreciate”, Kalia said.

—ramavarman@khaleejtimes.com