BOI, Union Bank join hands with IDFC for loan

Mumbai, Nov 8: Two leading public sector banks, Bank of India (BOI) and Union Bank of India have joined hands with Infrastructure Development Finance Company Ltd (IDFC) for loan syndication.

Under this arrangement, BOI and Union Bank would give a single stop service to customers to meet all their financial needs including arranging long-term fund requirements for setting up new projects or expansion of existing facilities.

Addressing a joint press conference here today, Union Bank of India's Chairman and Managing Director M V Nair said this is the first time that two public sector banks have entered into a formal working arrangement to pool their skill sets to provide a single window solution to customers.

Mr Nair said the two banks along with IDFC in the next five months are set to disburse over Rs 11,500 crore on 16 projects already identified by them. Responding to a query, he said in all, they have broadly identified over 60 projects for financing over 12 months time frame involving a funding of Rs 45,000 crore.

BOI Chairman and Managing Director M Balachandran said, ''The two banks have a good number of common customers and as such would like to give single stop service to such customers to meet their financial needs.'' Currently, BOI's exposure on infrastructure projects amounts to Rs 5000 crore, while that of Union Bank around Rs 5500 crore, said the CMDs of both the banks when queried about it.

IDFC Managing Director and CEO Dr Rajiv Lall said that IDFC has vast experience in appraising large infrastructure projects whereas BOI and Union Bank have experience in appraising working capital finance apart from project financing. ''In the present days of large project funding, pooling of skills of the three organizations to develop talents over a wide spectrum of industries,'' said he.

The arrangement will facilitate joint identification, marketing, appraisal and underwriting of project finance, which will provide a total solution to the promoters, Mr Lall said.

At the same platform, BOI and Union Bank announced a few more initiatives of working together. One such initiative is to offer Cash Management Services leveraging the technology and branch network of each other.

Incidentally, both banks use the same IT platform - Finacle of Infosys. While BOI has implemented Core Banking Solution in 1008 branches covering more than 300 cities in 17 states, Union Bank has implemented it in 850 branches covering 241 cities in 22 states.

Another area where the banks will join hands is in international operations. BOI will be the preferred bank for Union Bank for their overseas operations.

UNI