By IANS
Chennai : Mumbai-headquartered Union Bank of India (UBI) is on a network expansion spree, a top official of the bank said here Friday.
“The bank will be adding around 600 more outlets to our existing 2,516 branches during 2008-09. The bank will also recruit around 4,000 employees in different cadres,” P.Y. Nagar, general manager of UBI, told the media here after launching the reverse mortgage product, Union Reverse Mortgage (URM).
He said UBI has not closed down any of its branches since the day reforms in the banking industry started.
“We have relocated rural branches but not shut down a branch,” he added.
Besides the domestic expansion, UBI is also planning to set up an extensive overseas presence.
The bank will shortly open a branch in Hong Kong and is looking at Australia, Singapore, the Middle East and other places having sizeablepopulation of NRIs.
With the launch of Union Reverse Mortgage (URM), the bank has become the latest public sector bank to launch reverse mortgage.
As the name suggests, reverse mortgage is reverse of normal mortgage and restricted to housing property.
“Instead of lump sum upfront, the borrower gets monthly equated payment for 10-15 years,” Nagar said.
“The bank will become the owner after that and realise its dues by selling the property. Surplus if any will be paid to the legal heirs,” he added.
Giving details of URM, he said the loan could be availed by homeowners who were 60-year-old or more and be availed jointly with the spouse provided he/she was older than 55 years.
The amount disbursed will be 70 percent of the market value of the property with the bank retaining 30 percent as margin money. The rate of interest is 10 percent.
The bank can reset the loan amount and the interest rate very fifth year.
Speaking about UBI’s performance in 2007-08, S. Ramaswamy, assistant general manager, said: “UBI did a total business of Rs.1.8 trillion (deposits Rs.1 trillion, advances Rs.762.4 billion) as against Rs.1.5 trillion (deposits Rs.811.8 billion, advances Rs.636.6 billion) posted the previous fiscal.”