Chennai: Union Bank of India is in the process of developing a special foreign exchange 'pricing engine' software. This would enable the exporter / importer community to hedge its foreign exchange positions online on a real time basis.

According to chairman and managing director M V Nair, the software will be loaded at the client's premises if they subscribe to Reuters Trading for Foreign Exchange (RFTX) and Reuters Trading for Bullion (RTFB) service. Presently the bank's customers have information platforms like Reuters Xtra 3000 or similar system from other service providers. For these clients, such information then becomes a trade quotation through RTFX and RTFB for instant buying or selling foreign currency / bullion.

"We will provide the pricing engine software free of cost to the subscribers of the above service. The software development cost is estimated to be around Rs 30 lakh," says Nair.

The bank has signed an agreement with the Director General of Foreign Trade (DGFT) for payment of licence fees electronically. "Union Bank is one of the few select banks offering e-payment facility for licence fees."

According to Nair, the bank's advances portfolio to the export sector was around Rs 5,703 crore at the end of 30 June, 2006, and is expected to touch Rs 6,600 crore by the end of this fiscal. The bank targets to achieve an export turnover of Rs 24,980 crore, import turnover Rs 14,535 crore and remittances turnover of Rs 10,504 crore this year.

Meanwhile the bank has sought the services of 34 agents to recover its bad loans. "We are in the process of readying our back office support in identifying and recovering the non performing assets (NPA). We will designate five branches as asset recovery branches," said Nair.

It may be recalled the bank's net profit fell by 30 per cent to Rs 166.81 crore during the first quarter, against Rs 240.39 crore registered in the previous quarter. According to Nair, the profit came down because of higher provisioning. The provisions increased to Rs 157.89 crore from Rs 64.69 crore made the previous year.

The bank's investment portfolio also took Rs 50 crore hit due to the market crash. "We will make up that loss this quarter as the market is recovering," he said.

During the current year the bank is targetting a growth of 23 per cent in small and medium enterprises segment, 33 per cent in agriculture and 38 per cent in retail. The corporate sector will be targetted by 50 specialised corporate branches.

On the progress of the bank venturing overseas, Nair said, "Our plans to set up operations in Hong Kong and Shanghai are progressing fast. However permission to have a branch in Doha (Qatar) may take time."