UWB: A hot oppurtunity for banks to expand business in Maharashtra

New Delhi, Sep 4 (UNI) Struggling United Western Bank (UWB) has become a hot cake for private as well as public sector banking institutions seeking to penetrate into Maharashtra.

In fact, more banking institutions, which either don't have adequate market access in Maharashtra or are planning to expand base in the state, are likely to jump in the fray.

UBW has a wide rural network in Maharashtra, with Rs 7,000 crore assets spread across nine states in the country and nearly 20 lakh depositors, which is enough for fulfiling the ambitions of interested parties.

At least three public and two private banks have joined the race for the amalgamation of UWB, which has been placed under moratorium till December 1, by the Reserve Bank of India (RBI) on Saturday.

After the country's second largest lender, ICICI Bank, becoming the first to announce its interest in UWB, public sector Canara Bank and Ahallabad Bank today submitted to the RBI their Expression of Interest (EOI) while South India-based Federal Bank and Andhra Bank also gearing up to follow suit.

It is learnt there will be no bidding process for the amalgamation and RBI's discretion will be supreme, the public sector banks have an edge over their private counterparts.

''The public sector banks generally get preference over the private sector banks (in the merger of sick banks),'' analysts say.

The minimum investment to acquire ailing UWB is seen at Rs 300 crore.

Incorporated in 1936, the bank, has its Head Office at Satara, Maharashtra, which oversees the operations through the five Zonal Offices at Mumbai, Pune, Kolhapur, Jalgaon and Nagpur.

ICICI Bank says, it believes that UWB's network can be leveraged to grow its rural and small and medium enterprise banking operations in particular and its overall distribution franchise in general.

While according to Canara Bank, the move comes in view of a number of positive synergies existing between the two banks especially in terms of the network of branches, geographical contiguity. The bank's excellent tract record as the largest nationalised bank meets UWB's need for a strong, effective and professional management, it equipped in a statement.

Keeping in view the depositors, sick banks are generally merged with the state-run banks.

A few years ago, the RBI had merged Global Trust Bank and Nedungadi Bank with Oriental Bank of Commerce and Punjab National Bank -- both state-run -- respectively.

However, ICICI had also acquired a southern India's Bank of Madura.

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