Union Bank Conducts Survey On Resuming Mid-East Operations

Mumbai, January 28: | Updated: Jan 29 2003, 05:30am hrs
Union Bank of India is conducting a survey to restart its foreign operations in the Middle East after a lapse of five years of exiting foreign operations.

It had been keeping away from direct foreign operations after 1998, when it exited from the Deposit Taking Company (DTC) in Hong Kong.

"We have shortlisted three countriesthe United Arab Emirates (UAE), Sultanate of Oman and Qatarfor possible opening of a representative office. We are serious about opening a representative office in three months time. A team will be visiting these countries in mid-February for final survey," Union Bank deputy general manager HSU Kamath told FE.

"Once we select a location for setting up a representative office, we will approach the Reserve Bank of India (RBI) for its approval, and regulatory approvals from the other country will also be sought," Mr Kamath added.

Banks can pursue only product promotion through representative offices and are not allowed to pursue any banking business (acceptance of deposits and disbursal of loans) till they are upgraded to a branch.

In many areas including the Middle East it is not possible for any bank to start a branch from the beginning. "However, for banks, it gives an opportunity to test the business potential of the location before starting full-fledged banking operations," Mr Kamath said.

"Though we are also planning to start office in China, it may take some more time before initiating the survey process. But it has already been identified as a potential location for starting operations," Mr Kamath said.

Union Bank was one of the joint venture partners, with Bank of Baroda and Indian Bank, of the Hong Kong-based Deposit Taking Company (DTC) as it was called, till 1998.

Subsequently, it was sold to BoB by the other partners. The stake was sold on the insistence of Hong Kong Monetary Authority (HKMA) for single ownership of foreign bank branches in the wake of the East Asian currency and economic crisis. Another branch of the bank located in London was taken over by BoB in the 1980s.

Since 1998, the bank has developed a massive network of of 400 corresponding banks covering 480 countries.