Union Bank of India (UBI) on Wednesday said it is witnessing reasonable growth in

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the retail segment. “Housing loans have clocked a growth of 23 per cent year-on-year till the end of second quarter and there was a 30 per cent growth in education loans year-over-year. But, credit demand has not been up to our expectations,” said M V Nair, CMD, Union Bank of India.

However, Nair said the growth in loans to companies is lukewarm, which has forced the bank to scale down its overall credit growth target to 18 per cent from 25 per cent targeted earlier for the present financial year.

“While, the sales of many companies have fallen, yet their income has gone up, primarily because of cost-cutting and better efficiency, resulting in lower returns,” Nair added.

Nair was speaking to reporters on the sidelines of a function organised for core-banking system (CBS) rollout in two of UBI’s regional rural branches. Two regional rural banks namely Rewa Siddhi Gramin Bank in Madhya Pradesh and Kashi Gomti Samyut Gramin Bank in Uttar Pradesh have been brought into the CBS platform. Both the banks put together have close to 447 branches. When asked about the outlook on interest rates, Nair said, “We expect a stable interest rate regime both in lending and deposits until the end of present financial year.”

Nair denied there was negligence on the part of the bank while accepting deposits linked to the alleged mutli-crore scam involving Madhu Koda, former chief minister of Jharkhand. M V Nair, CMD of UBI, said the bank has reported all high-value cash transactions to the authorities concerned and refuted the tax department's allegations that over Rs 10 lakh in transactions were not reported to the Financial Intelligence Unit.