The deal has been finalised, but the agreement is yet to be signed. This (offering network) is one way of expanding our non-interest income, Union Bank deputy general manager HS Upendra Kamath confirmed to FE.
The Union Bank has set a target of taking the banks non-interest income to the level of 45 per cent of the non-interest expenditure for the current fiscal year (ending March 2003). Non-interest income streams of the bank include CMS, depository services, distribution of mutual funds (MF) and insurance products, and import and sale of gold to bullion traders.
Though the bank is a late entrant in CMS services backed by its own systems, we were operating in the area through other banks. We now have more than 100 corporates as our clients, Mr Kamath said.
The backbone network connecting a wide network of branches would enable Corporation Bank to offer services to cover new geographical areas, Mr Kamath added.
The Union Bank has over 2,000 branches, while the Corporation Bank has over 700.
The banks has put the insurance product distribution business on fast-track mode. Distribution of general insurance products of New India Assurance Co, is likely to be launched in the first week of next month, while the bank is set to offer life insurance products of HDFC Standard Life from 9 cities by February-end. The bank has kicked off distribution of life insurance products last month in Mumbai and has started offering products from three other cities Ahmedabad, Kochi and Lucknow. These products will be offered in Kolkata, Delhi, Hyderabad, Bangalore and Chennai.
The bank, which is targeting to book 5,000 policies by March, has already booked over 1,300 policies with a sum assured of over Rs 15 crore and clocked a premium of Rs 1.2 crore, Mr Kamath said. The bank has 110 officers trained in distribution of both life and general insurance products.
Depository services, which are being offered frm eight centres now would be made available in seven more cities by March-end. It already has over 11,000 DP accounts, Mr Kamath added. The banks MF distribution is still limited to Mumbai.