BackFocus on NPA recovery to continue at United Bank: Rajiv Takru
Department of financial services secretary says government has worked out a rough plan of action
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New Delhi: United Bank of India will be asked to continue its focus on recovering bad loans, as part of efforts by the government and the central bank to resolve the issues at the state-run lender.
“We have worked out a rough plan of action. Focus on NPA (non-performing assets) recovery will continue," Rajiv Takru, secretary, department of financial services, said on Friday. “There are also some administrative changes that we are considering."
He did not elaborate on the administrative changes but ruled out superseding the bank’s board.
Finance minister P. Chidambaram met Reserve Bank of India (RBI) governor Raghuram Rajan on Friday to finalize the plan to resolve the issues at United Bank of India.
United Bank made a loss of ₹ 1,238.08 crore in the quarter ended 31 December against a net profit of ₹ 42.2 crore a year ago, because of rising bad loans. The bank’s gross NPAs were at 10.82% at the end of December.
Following increased scrutiny, the bank has started an aggressive drive to pare its bad debts. In the last two months, United Bank made a cash recovery of ₹ 400 crore and upgraded ₹ 800 crore to standard accounts from NPAs.
In a press briefing on Wednesday, Chidambaram had said the government would look at strengthening the management of United Bank, where the post of chairman and managing director is lying vacant after Archana Bhargava resigned last month.
The government is considering appointing Mukesh Kumar Jain, an executive director in Punjab and Sind Bank, as chairman and managing director of United Bank.
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