Date:30/07/2007 URL: http://www.thehindubusinessline.com/2007/07/30/stories/2007073051111400.htm

Back Union Bank eyeing a share of reverse mortgage pie

Our Bureau

Coimbatore, July 29 Union Bank of India (UBI) is eyeing a slice of the reverse mortgage pie and expects to finalise the product details in about two months.

The bank is undeterred by concerns expressed about growing delinquency in personal and housing loan repayments and plans to have 33 Retail Asset Branches (RABs) that would deal with a slew of products, before the end of the current fiscal.

Speaking to presspersons in Coimbatore on Saturday, Mr R. Vishwanathan, General Manager, Retail Banking Department, UBI, Mumbai, said his bank was working on the reverse mortgage product, primarily targeted at senior citizens who do not have a regular stream of income. Instead of leaving the property idle, the owners could opt for the scheme under which they would be eligible to receive 40-45 per cent of the assessed value over a period of time as loan.

Asked how UBI’s reverse mortgage scheme would be different from others offering it (Dewan Housing and Punjab National Bank have already launched this product), he said the bank could bundle the product with some insurance scheme and the borrowers could also be given ATM cards. The bank is looking at those opting for reverse mortgage as a section of people in need of assistance.

Retail lending

He said the retail lending activity accounted for about 21 per cent of the bank credit and this was close to the industry average of 24 per cent. UBI hopes to increase it to 30 per cent by the end of current fiscal.

The bank expects to bring almost all its branches under the core banking solution net work by March 2008. He expected the remaining RABs to be opened during the current quarter. He hoped the newly opened RAB at Coimbatore would achieve a business of Rs 50 crore in the current fiscal.