The Hindu : City Union Bank: poised for a bright future

Online edition of India's National Newspaper
Sunday, Dec 28, 2003

Business

Business

City Union Bank: poised for a bright future

By P. Narasimhan

CHENNAI DEC. 27. The Kumbakonam based City Union Bank, which has been playing an active role in catering to the various needs of customers for many decades, is celebrating its centenary this year. Founded in 1904 under the name, The Kumbakonam Bank Limited, it has grown in size and stature over the decades. In 1965, it was rechristened as The Kumbakonam City Union Bank Limited after amalgamating two other local banks — City Forward Bank and Union Bank Ltd — with itself.

After O. R. Srinivasan, a former senior officer of the Reserve Bank of India, took over Chairman and Chief Executive Officer in 1969, the bank started spreading its wings at a fast pace outside Thanjavur district.

The present Chairman, V. Narayanan, assumed office in November 1980. Under his leadership, the bank showed significant growth in terms of volume and branch network. In September 1980, its first branch outside Tamil Nadu was opened in Bangalore followed by branches in the twin cities of Hyderabad and Secunderabad in Andhra Pradesh. Its name was changed to City Union Bank Limited in December 1987 in tune with its growing national image.

Deposits now stand at Rs. 2,700 crores while advances on March 31, 2003 were Rs. 1,214 crores.

The bank has 125 branches and has its presence in Tamil Nadu, Andhra Pradesh, Karnataka, Maharashtra, Gujarat, West Bengal, New Delhi and Pondicherry. Ten more branches will be opened during the current year to sustain the current pace of growth.

The RBI, in October 1990, granted an Authorised Dealer licence to the bank to deal in foreign exchange business.

The present paid-up capital is Rs. 24 crores against reserves of Rs. 140.77 crores. In 2002-03, it generated an income of Rs. 287.45 crores and a net profit of Rs. 33.37 crores. The bank maintained the dividend at 40 per cent..

It introduced computerisation in 1990 and 99 out of 125 branches have been fully computerised. The software team of the bank has developed the interface for the ATM and also the card management system inhouse. With the implementation of core banking with the assistance of Tata Consultancy Services, the bank has a target of 35 ATMs in a couple of years. It has already opened five `on site' ATMs. There are plans to open more ATMs in the near future. "Providing value added services" is the management's mantra. Memoranda of understanding have been signed with the Life Insurance Corporation of India and National Insurance Company for marketing their products.

The bank has been accorded licence by the Insurance Regulatory and Development Authority to undertake corporate agency business. It has plans to co-brand value added banking products with insurance elements.

With the efforts at upgrading technology, comfortable level of capital adequacy ratio, improved profitability and a vigorous drive to widen its network and customer base, CUB is poised for a big leap in the coming years.

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