Union Bank

Mumbai, Oct 23 (UNI) Two public sector banks - Union Bank of India and Bank of India - are set to forge an alliance with an intent to act as a loan syndicator, a crucial job being hitherto done by outsiders.

Responding to a UNI poser, Mr R S Reddy, Executive Director, Union Bank of India said, ''The idea was to act as a loan syndicator and collecting the syndication charges from the customers of both the banks. Normally, this job was being done by a third-party loan syndicators for a fee.'' Explaining, Mr Reddy said, ''In case we do it all by ourselves in alliance with few other banks, then the syndication charges will come to us (banks) directly, thereby augmenting kitty of the fee-based income.'' To a specific query, Mr Reddy said the syndication charges vary between one and 1.5 per cent depending on the catagory of the loan amount. He also hinted that the bank is currently doing an 'informal workout' on the modalities of this business before it exactly start the service.

''First we'll assess the requirement of our customer and then only think of funding for the projects being undertaken by them,'' he added.

To a question on Dena Bank's involvment, another top officer said, ''It is still in talks stage. It may also join later.'' UNI KKD/SN KU SKB1855