1. LIVE WIRE
TOPIC: UNITED BANK OF
INDIA RECOVER 1
CRORE BAD LOANS
Submitted By:
Anjali Gupta
MBA (FA) B
8 March 2014
2. 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
2
The Economics Times
3. 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
3
The Economics Times
4. 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
4
The Economics Times
5. 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
5
The Economics Times
