Page 7 - Banking Finance March 2021

BANK UPDATE

Nabard to raise Rs. 40,000 alerts after Biswas changed the two times to deposit a Rs. 60,000
contact details linked with her Kaikhali cheque in my account and it was not
crore through long-term branch account, Biswas teamed up accepted citing integration problems,"
bonds with Samiran Saha and stole the M Karunakar, a customer of Andhra
The National Bank for Agriculture and money. When the bank found out, Bank, told.
Rural Development (Nabard) is Biswas was suspended. Similarly, erstwhile Andhra Bank's
planning to raise up to Rs. 40,000 crore ATMs are non-functional in many
through long-term bonds. Union Bank of India to locations, which is forcing customers to
The money raised will be mostly used 'rationalise' 950 branches withdraw from the ATMs of other
for rural development programmes soon banks by paying additional charges.
run by the government. Nabard, the At some branches, notices have also
government-owned financial Union Bank of India plans to rationalise been displayed stating that there was
institution, mostly raises funds through about 950 of its branches soon. "As per disruption due to the integration of
short- and medium-term instruments. the consultant's report, the bank has operations.
It looks for long-duration instruments targeted to rationalise about 950
branches in the first year of "It is true that there has been a
when working on behalf of the disruption. But we are working round-
amalgamation of Corporation Bank
government, bond market dealers the-clock and, as of now, 65 per cent
and Andhra Bank with itself," a senior
said. of erstwhile Andhra Bank's ATMs are
Union Bank official told.
Rating agency ICRA has assigned functional," said the Union Bank
"AAA" rating to these bonds. Broadly, Corporation Bank and Andhra Bank official.
these rating are valid for one year. The were amalgamated with Union Bank The clearing of cheques will also reach
financial institution, with quasi- with effect from April 1, 2020. The
government, in August 2019, had normalcy in about a week to 10 days,
sovereign status, has maintained a he added.
competitive and diversified funding announced the merger of 10 public
sector lenders into four bigger and
profile supported by low-cost rural
infrastructure development fund stronger banks. Stress in retail loans of
deposits. "The real benefits of amalgamation banks may triple by FY22
will only be derived if rationalisation of end: Ind-Ra
Bank employee arrested branches happens," the official added.
Stress in retail loans could triple by the
for Rs. 3.2 crore fraud The close proximity of branches of end of FY22 due to a slowdown in
erstwhile Andhra Bank, Corporation
The Bidhannagar cyber cell (Kolkata) income growth and slower pace of job
Bank and Union Bank, besides
nabbed an employee of a private bank optimisation of operational costs and creation in the service sector, credit
for allegedly siphoning Rs. 3.2 crore the need to avoid business overlap are ratings firm India Ratings & Research
from a Baguihati-based customer and among the factors that are driving (Ind-Ra) said. It estimated that
redirecting the money into eight rationalisation plan. stressed loans from retail advances
accounts. The accused had changed could rise to 4.7% of the total in March
the phone number and email ID of the Union Bank now has over 9,500 2022 from 1.60% in March 2021, led
victim, then residing in Chennai, before domestic branches and 13,300 ATMs by slippages in unsecured loans -
committing the crime. Cops said the with 75,000 employees. Meanwhile, especially at private sector banks.
Calcutta High Court had rejected the bank is struggling with delay in Jindal Haria, director Ind-Ra, said
Bappaditya Biswas's anticipatory bail integration of Andhra Bank's private sector banks are likely to
and the accused was sent to police operations, even 10 months after the experience higher slippages from retail
custody for two weeks. amalgamation. loans with total stressed loans
According to special public prosecutor In many branches, customers are not increasing about three times, mainly
and cyber expert Bivas Chatterjee, being allowed to deposit cheques for due to their share in unsecured
when the victim stopped receiving clearance. "In the last 10 days I went loans. T

BANKING FINANCE | MARCH | 2021 | 7