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TOPIC: UNITED BANK OF INDIA RECOVER 1 CRORE BAD LOANS

Submitted By:

Anjali Gupta

MBA (FA) B

8 March 2014

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NEWS

Finance Minister P Chidambaram started his speech and said : United Bank of India recover bad loans worth at least Rs 1 crore every

day until the end of this month. Kolkata based UBI posted a net loss of Rs 1,238 crore in the three

months ended December, during which its gross non-performing assets (NPAs) surged to Rs 8,546 crore from Rs 2,964 crore at the end of March last year.

UBI has recovered Rs 400 crore in cash and has upgraded Rs 800 crore worth of accounts. The bank is focusing on recovery of both retail and corporate loans and NPAs have been reduced by Rs 1,200 crore.

The government, which holds an 88 per cent stake in the bank, has provided Rs 700 crore as capital to UBI in last financial year.

8 March 2014

The Economics Times

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Archana Bhargava quit as UBI Chairperson and Managing Director in February, opting for voluntary retirement on health grounds.

The minister said a large part of the meeting was focused on bad loans and the steps needed to recover them.

Chidambaram indicated the government would soon appoint a chairman. "At the moment there is executive director and we will strengthen the

management of United Bank," Chidambaram said.

8 March 2014

The Economics Times

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CAUSE

Most of these small loans were provided to small businesses or under government-backed schemes such as ones to promote entrepreneurship and farming. Agriculture and small and medium enterprises account for Rs.2,058 crore of the Rs.4,545 crore increase in gross NPAs, whereas large industry added only Rs.1,283 crore to United Bank’s .

Slowing economic growth, rash expansion by companies and delays in large projects caused by fuel shortages and problems related to land acquisition and environmental clearances.

8 March 2014

The Economics Times

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CURRENT UPDATE

United Bank of India may merge with Union Bank but Arun Tiwari, CMD of Union Bank, denied the merger.

RBI Governor Raghuram Rajan is pushing banks hard to control bad loans. Rajan has announced measures for early detection of stressed assets, greater discipline and monitoring by lenders either through coordination with others or through internal processes.

The ministry has asked the top UBI executives to furnish a bad loan recovery status on a daily basis.

"If the bank can improve profits, it will get back on track," said a chairman of a public sector undertaking (PSU) bank.

8 March 2014

The Economics Times

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8 March 2014

The Economics Times

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