Allahabad Bank to speed up processing of retail loans through hubs

Kolkata-based Allahabad Bank will be setting up six retail hubs. The main idea behind the set up of hubs is to speed up the processing of retail loans. Along with this bank will also be setting up special business units (SBU) to boost its fee-based income. Bank has selected small and medium enterprises as the other thrust area.

In the beginning the hubs will be set up across Chennai, Bhopal, Delhi, Kolkata, Mumbai and Lucknow in over three months. At these hubs the processing of personal, education and auto loans will be done. Allahabad Bank Executive Director J P Dua stated that

the retail segment of the bank accounts for 17 per cent of the bank's total advances of Rs 50,000 crore, with the coming up of hubs the advances will increase credit contribution of the retail segment to 25 per cent by 2010.

Once the hubs become operational the disbursement of educational loan which currently takes 2-3 days will reduce to 24 hours. The bank

The idea behind the hubs is to speed up processing the retail loans. At present, education loan disbursement takes 2-3 days, which will now be reduced to 24 hours. The bank has online application facility for educational loans therefore it has tied-up with 250 colleges across the country to make it easy for the students to apply for the loan. Likewise disbursement of auto loans will also be reduced to two days as compared to a week’s time.

Giving details about the plans related to the SBUs for selling third-party products such as insurance and mutual funds, Dua said, "We've identified 140 units within the bank, which will concentrate on improving fee-based income through selling insurance and mutual fund products. The bank aims to earn a commission of Rs 50 crore in 2008-09."

Allahabad Bank has tied up with Life Insurance Corporation (LIC), UTI Mutual Fund, Principal PNB, Kotak Mahindra Mutual Fund and Reliance Asset Management Limited.

Dua told Allahabad Bank has obtained licenses to open 114 new branches across the country and most of them will be located in new suburbs, tier-II and tier-III cities.

He informed as on March 31, 2007 the bank’s total business grew up by around 20 per cent to Rs 1.22 lakh crore over Rs 1.01 crore. The bank has set a target of Rs 2 lakh crore by December 2010. "By March 2009, we aim to achieve a business of Rs 1.5 lakh crore," said Dua.

However the deposits grew to Rs 71,600 crore in the last financial year (Rs 59,544 crore), while advances increased to Rs 50,300 crore (Rs 42,000 crore).