As far as United Bank is concerned, it is neither a shock nor a surprise to the RBI, and it shouldnt be to you, Chakrabarty said at a press conference. He added that the RBI has not conducted any probe into the United Banks affairs by itself.
We havent conducted any probe. It is the bank chairman who wrote to the governor as well as the FM, saying that, at her bank, accounts are not classified as NPAs and requested the RBI to go for a forensic audit. Chakrabary said the RBI conducted an audit and found that accounts were actually not classified as NPAs.
In February, the bank had decided to suspend its loan facilities for an indefinite period, due to high level of stressed assets and diminished capital adequacy.
However, as there were reports of the government planning to infuse R1,000 crore into the bank, it resumed lending operations a few days later. Following this, bank chairman Archana Bhargava resigned.
The RBI, in December 2013, had restrained United Bank from advancing credit of more than R10 crore to a single borrower and also restricted it from restructuring stressed assets, after conducting a forensic audit in November.