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UBI gets directive from RBI on bad assets

Author: IANS/Thursday, December 21, 2017/Categories: Regulatory

UBI gets directive from RBI on bad assets

Kolkata - State-run lender United Bank of India said the Reserve Bank of India (RBI) has prescribed certain additional actions under the Prompt Corrective Action (PCA) Framework in view of its high net non-performing asset (NPA) and financial health.

"...The Reserve Bank of India has prescribed certain additional actions under the Prompt Corrective Action Framework, in view of high net NPA, low coverage ratio and requirement to raise capital, based on the assessment of the Bank's position as on March 31, 2017," it said in a regulatory filing.

The lender said the action points focus on profit retention, capital augmentation, provision coverage, diversification to the steps already taken by the management in these directions.

The bank had reported a net loss of Rs 344.83 crore for the second quarter ended September 30 against a net profit of Rs 43.53 crore for the corresponding period a year ago.

Its asset quality deteriorated further in the September quarter of the current fiscal and gross non-performing assets (NPAs) in absolute term rose 15.8% year-on-year at Rs 12,892.67 crore during the period.

Its gross NPA as a percentage of total loans rose to 18.80% in the September quarter this fiscal from 16.26% during the same period in the previous fiscal.

The lender, however, said the regulatory action is not likely to have any material impact on its performance and will continue to the improvement of the internal control and intrinsic strength of the bank.

"The normal banking activities viz acceptance of deposit, credit disbursement and treasury function remain unaffected and unaltered," it added.

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