Bhandari: In top gear

Calcutta, April 25: Centurion Bank of Punjab has roped in City Union Bank and M.S. Verma, former chairman of the State Bank of India, to float an asset reconstruction company.

“We have already got an in-principle approval from the Reserve Bank of India to set up the company and it will be floated soon,” Shailendra Bhandari, Centurion Bank of Punjab managing director and chief executive officer, said.

The company, called International Asset Reconstruction Company, will be set up with an initial capital of Rs 10 crore.

Centurion Bank of Punjab and City Union Bank will pick up a 30 per cent stake each in the venture. Verma will own the remaining 40 per cent. “Verma will head the asset reconstruction company,” Bhandari said.

Centurion Bank of Punjab is also setting up a separate company to provide fee-based estate management services to individual customers. These include legal assistance to private or family trusts and Hindu undivided families and writing a will of property.

“The fees will depend on the services and the customer’s relation with the bank. Non-bank customers will be charged more than the existing ones. Moreover, customers who maintain a higher balance with our Centurion Elite Banking service will be charged the minimum. They will, however, have to bear the cost of stamp papers and pay the lawyers,” Bhandari said.

Centurion Elite Banking requires a minimum quarterly average balance of Rs 1 lakh in an account.

The company, called Cerma, will be set up in a couple of weeks as a joint venture with a few solicitor firms.

Centurion Bank of Punjab expects to clock a total business of Rs 26,000 crore in 2006-07, of which deposits account for Rs 15,000 crore and advances Rs 11,000 crore.

The bank is also planning to enter retail stock broking. “For this, we will partner with Ambit Corporate Finance and Web 18. We will have a 20 per cent stake in the venture,” Bhandari said.

“While we have proposed a greenfield venture for stock broking, we are open to acquiring an existing brokerage house,” he added.