CITY UNION BANK Share price

The Bank - The Kumbakonam Bank Ltd. as it was then called was foundedin the year 1904 by a devoted group of prominent and enterprisingcitizens of Kumbakonam town in Tamilnadu. It is one of the leadingscheduled commercial Banks in the Private Sector with a hoary traditionand excellent track record with a strong base in Urban Semi-Urban andRural Centers in South India. In 1965 under a scheme of amalgamationtwo other local banks The City Forward Bank Ltd. and The Union BankLtd. were amalgamated with it and consequent upon this the name waschanged to The Kumbakonam City Union Bank Ltd.". In the process ofbuilding up of an image of a national character the name of the Bankwas changed to the present name CITY UNION BANK LTD." in the year 1987.Over the years the Bank has steadily grown to become a bigger bankwith a network of 103 branches spanning 6 states and 2 unionterritories and 1376 employees. The Bank has consciously followed apolicy of upgrading technologies expanding and modernising its networkof branches to meet the growing demands of customer service and reach.It has now 43 fully computerised branches and five more are slated tobe computerised this year. The International Banking Division of 7theBank has ventured successfully in financing of imports exports andalso provides foreign currency loans. Its export credit stands around13.49% as on 31.12.97 of the total bank''s advances. The Bank is aCategory I Merchant Banker and has been the Lead Manager andUnderwriter of many Issues. It has also lent its expertise in projectappraisal and issue management. In order to keep its employees abreastof today''s changing banking and trade scenario the Bank regularlyconducts staff training and orientation programs through its own StaffTraining College. The Bank has consistently paid a dividend of 25 %since 1993-94. For the year 1996-97 the Bank has paid a dividend of30%. The Bank has been ranked as the sixth healthiest Bank in terms ofReturn on Net Worth for the Financial Year 1997 as per a reportpublished in Business India dated December 29 1997 to January 111998.OVERVIEW OF THE BANKING ENVIRONMENTRBI has been advocating stimulation of growth with a secondary focus oninflation control for much of the last two years except in Dec.''97/Jan.''98 when it took strong measures to curb forex volatilitywhich yielded the desired results. The main objective of the currentmonetary policy of April''98 announced by the RBI is to increase thefinancial flows from Banks to Corporate Sector in view of the slowdownin industrial growth. The short term economic objective is toaccelerate industrial development and output in the economy.The Credit Policy addresses the following areas :1) Reduction in Bank Rate from 10 to 9% with an objective of signallinglowering of interest rates.2) Improvement in Credit Delivery Mechanism particularly toAgriculture Medium and Small Scale sectors. To remove thedisincentive to the flow of credit to small borrowers of less than Rs.2.00 lacs by lending at PLR which is available to the best borrowers. 3) Boost to exports by increasing the Refinance limit to 100% and alsoreducing the interest rate for Pre-shipment credit from 12 to 11%.4) The reduction in minimum period of Bank deposits from 30 to 15 dayswhich would result in better deposit mobilisations for Banks as alsoreshuffle in Current and Savings Deposits by investors to benefit fromhigher interest rates paid on short term deposits.5) To discourage short term External liabilities by decreasing theinterest rates on FCNR(B) Deposits for periods of less than 1 year andsimultaneously increasing rates for periods over 1 year.6) No change in CRR at present as the liquidity conditions arecomfortable.