Government to United Bank of India: Focus on recovery of sticky loans-Times of India
KOLKATA: The government has told the United Bank of India to keep focusing on recovery of sticky loans for another few quarters to clean up its balance sheet which has been strained by bad assets and record losses.
The government, which owns 88% stake in the bank, told this last week after it reviewed UBI's performance for the quarter to March, before the bank's board is set to meet on May 5 to consider the results. "The ministry had assigned a task to improve asset quality. On that ground we have done well," executive director Sanjay Arya told ET on Tuesday. "The ministry wants us to continue with that kind of performance."
Arya, along with executive director Deepak Narang, held a meeting with top finance ministry officials on April 25. The bank is believed to have recovered and upgraded sticky assets to the tune of Rs 2,000 crore between January and March while fresh slippages during the quarter amounted to less than Rs 500 crore, two persons familiar with the matter said.
Arya refused to comment on this set of numbers. The lender started recovery in earnest since January after its bad loans swelled in the October-December 2013 quarter. This is expected to help UBI reduce gross NPAs to Rs 7,000-7 ,200 crore by March end from Rs 8,546 crore on December 31, 2013, the persons cited earlier said. The lender is also examining seven large borrower accounts with debt restructuring proposals involving Rs 1,000 crore.
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