In another major development, the stake-holding of UTI Bank' main promoter, the Unit Trut of India (UTI), is expected to be come down to 40 per cent in the next six months from 72 per cent as on March 31, 1999. "The reduction in UTI's shareholding may be accomplished through infusion of fresh equity or an offer of sale of shares by UTI, or a combinations of both. However, the details are currently being worked out with UTI," UTI Bank chairman and managing director, PJ Nayak told The Financial Express.

"The Rs 100-crore issue is UTI Bank's first ever tier-II issue and this will raise our capital adequacy from 11.64 per cent as on March 31, 1999, to more than 12 per cent. The issue size is Rs 75 crore and it has a greenshoe option of another Rs 25 crore. The tier-II bonds will have a maturity not exceeding 90 months and its coupon rate will be decided through a book-building process," UTI Bank has also applied to the Reserve Bank of India (RBI) for increasing its branch strength from 45 at present to more than 100 branches across the country in the next 18 months. "We have already obtained RBI approval for 15 branches and the first of these will be opened in Nagpur on Tuesday, March 7, 2000," Nayak said.

"Apart from expanding the branch network, UTI Bank has drawn up plans for installing 200 more ATM machines (both offsite and on-site). It has 59 ATMs already in operation. This will provide clients a ready access to funds and will also be used to generate more deposits and other businesses such as collection centres for certain bill-payments," Nayak added.

"We plan to emerge as a major force in the e-commerce busines. To start with, UTI Bank has changed its IT backbone from a decentralised database to a centralied database. All our branches across the country will be linked through the leased lines to the centralised database located at Mumbai.

This network will enable our customers to initiate inter-city funds transfer. We are in talks with some banks to extend this facility for inter-city, inter-bank funds transfer. However, a final decision will hinge on the RBI regulations which are expected within this year," Nayak said.Meanwhile, the bank is all set to launch Net banking by the month-end apart from a clutch of retail loan products like auto loans, consumer and housing loans. "We have been providing cash management services to UTI for the last five months and are in the process of sprucing up our synergies with the promoting institution," Nayak said.