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Summary: Life Insurance options are available in plenty nowadays hence makes the best out of it.

UCO bank to increase ATM density

UCO bank has announced that it would substantially increase the number of ATMs of the bank operational in the country. As more and more people are opting for the modern banking facilities in order to make transactions, considering this the banks has decided to increase the ATM count.

The bank plans to take the total number of ATMs in the country to 1,500 by the end of current fiscal and eventually to 3,000 by the end of March 2013, at present there are 681 UCO bank operational.

The Filed General Manager of the bank, Mr. S. Rajaram said “We are targeting 25 lakh accountholders under the ‘Total Freedom' campaign.”

First lockless branch in the country by UCO Bank

UCO Bank has inaugurated a branch in Shani Shinganapur in Maharashtra that does not have any lock. This branch is first of kind in the country. However some have to say that it is a breach of the guidelines laid by RBI for the safety of money deposited in the banks. Due to the rise in the bank robberies center has made hi–tech security mandatory for all the banks in the country.

A senior bank official said “We took note of the general belief and faith of the people. Ever since the most revered temple came into existence several years ago, the village has not witnessed a single crime. In fact, all houses in the entire village have no doors. We took the risk and started the lockless bank a week ago,”

Local NCP Legislator started with the basic proceeding when he approached various banks with a request to open branch at Shani Shiganapur but most of them refused the proposal due to the security concerns. But then finally UCO Bank agreed to open a branch there. Before opening the branch the bank conducted a survey.

The Legislator said “All houses here have no doors. We are following a more or less similar practice. Our branch has doors, but they will never be locked. Adequate precautions are being taken for the safety of lockers and important documents ,”

However the local cops are not very happy with the development in the town, as they are saying that the bank has violated the norms of the centre. A senior police official said, “In view of increasing bank robberies, the Centre has made it mandatory for all banks to provide state of-the-art security. If a bank opens a lockless branch, it amounts to a breach of conditions . We will take it up with the DGP and RBI.”

UCO Bank finally short-listed three foreign partners for general insurance biz

UCO bank has finally short-listed three foreign partners for its proposed general insurance business.

UCO Bank Chairman and Managing Director Mr S K Goel stated, “We have short-listed 3 foreign player for the proposed venture and awaiting RBI approval for moving in the non-life business”.

In the proposed general insurance business the bank will have the major hold of stakes of 30 per cent whereas the foreign partners will have 26 per cent stake as per the present regulatory structure, he stated. The remaining shares will be taken by 2-3 domestic partners including public sector or private sector banks.

He further added that 7 domestic companies have shown interest to become partners in the venture. UCO Bank will be responsible for promoting and distribution in the business, while foreign and private partners will be responsible for the domain expertise.

Mr Goel said, “as soon as we get RBI approval we will sign Shareholders' Agreement and apply to IRDA for license.” Regarding investment required, Mr Goel said, the paid-up capital of the venture would be about Rs 150 crore. The bank will be investing around Rs 45 crore for the promotion of the proposed general insurance company.

Indian Banks venturing into non-life insurance biz

Most of the Indian banks in collaboration with foreign players are planning to make venture in the non-life insurance business. The public sector banks UCO Bank, Union Bank of India and Corporation Bank have announced their plans of setting up non-life insurance companies. According to industry consultants at present this is a trend among the state-controlled as well as private banks to expand their business in this area.

SK Goel, Chairman and Managing Director, UCO Bank stated, “We will hold a 26 per cent stake in a consortium of five players. Six foreign players and four to five domestic banks have evinced an interest in tying up with us. By month end we will finalize the domestic partners and next month call for bidding from the foreign players.”

As per the information given by the sources close to the development, besides other companies Travelers of United States, Liberty Mutual of Boston (which ranks 86th in the Fortune 500 titans list in the US), Berkshire Hathaway (the holding company of legendary investor Warren Buffet), Royal Bank of Scotland and Credit Agricole, might be invited for the bid.

In this business banks are aided by prospects of high valuation whereas the investment is relatively low.

“The order of capital is not as substantial as required in a life insurance business,” informed an industry analyst. He told that ICICI Lombard required only Rs. 300 crore over an eight-year period, while ICICI Prudential Life required Rs. 5,000 crore.

Private sector ICICI Bank, HDFC and Karnataka bank are already ventured in non-life insurance biz, as do public sector State Bank of India and Allahabad Bank.

Banks considering slashing interest rates

UCO Bank, Kolkata based lender has plans to reduce deposit rates by up to a 100 basis points (bps) while public sector banks are trying hard to pressurize the finance minister for slash in postal savings rate as a predecessor to lowering deposit rates. While from July Allahabad Bank will be slashing its benchmark prime lending rate (BPLR) by 25 bps to 12%.

On Monday UCO Bank chairman and managing director SK Goel informed, "We are likely to cut deposit rates by 50-100 bps. A final decision to this end will be taken in the first week of July."

Speaking on the sidelines of a banking conclave organized by Ficci’s eastern regional council Mr Goel, said bank’s interest rate margins is under pressure at 1.95% for the quarter to June. Since March 2009 bank BPLR has been at 12.5%.

In his speech at the conclave Mr Goel informed, "Banks need to reduce deposit rates before lowering lending rates. But as long as small savings rates with post offices continue to be at 8%, it would be difficult for banks to cut rates significantly. We’ve requested the finance minister to look into this aspect".

However UCO is hoping of 15-20% growth in profitability for the June quarter. Mr Goel said, "We are expecting higher profits based on improved treasury income, non-interest income and recovery of bad loans," and added that the bank registered a treasury income of around Rs 105 crore, as against Rs 60 crore in the corresponding quarter to June 2008. Its net profit for the period between April and June 2008 stood at Rs 133.44 crore.

UCO Bank general insurance JV joint venture to get finalized by September

State-run UCO Bank is working on plans to make its venture into general insurance business. According to top official details will be finalized by September, including the selection of partners.

UCO Bank Chairman and Managing Director S K Goel told PTI, "We plan to enter general insurance by launching a joint venture. We hope to finalize the JV structure by September".

Mr. Goel informed, "A final picture about the company will emerge in 2-3 months. We are currently in talks with potential players to set up the joint venture".

He added in addition to the government lender, there will three more partners of JV -- a state-owned bank, a foreign bank and a private general insurance company.

He informed that UCO Bank and the other state-owned lender will hold a joint shareholding of 49 per cent. The official said UCO Bank's shareholding will probably be in the range of 28-30 per cent in the JV.

Whereas the private insurer and foreign bank jointly will have a shareholding of 51 per cent in the subsidiary, Mr. Goel told, without disclosing the identity of players.

However several of the leading state-owned lenders, such as State Bank of India and Union Bank of India, are already having insurance subsidiaries in partnership with global players.

Goel added UCO Bank will be proceeding as a promoter and distribution partner in the business, while it is expecting the domain expertise from its foreign and private partners.

He informed the Kolkata-based lender for the meantime has decided to put on hold its plans to launch a financial services subsidiary seeing the adverse market conditions.

"We had plans to launch a financial services subsidiary. But, with the down turn in financial markets and the fact that credibility of rating have suffered in the recent past, we have decided to put the plan on hold."

Earlier the bank had plans of launching the subsidiary with a view to offer a one-stop-shop for financial services such as sale of insurance and mutual fund products, loan syndication and corporate advisory services.

UCO Bank was planning to launch the financial services unit in association with a foreign partner. In this UCO Bank was to hold a 49 per cent stake in the proposed company and the foreign partner 26 per cent.