The Reserve Bank of India has written to the finance ministry recommending the superseding of the board of the troubled United Bank of India, among other solutions, reports Arun S in New Delhi.
Confirming the letter, financial services secretary Rajiv Takru told FE: “Superceding the board is an administrative alternative that the RBI has suggested. But we are waiting for the inquiry report, which we should get soon.” If someone on the board is found guilty, Takru added, the question of supersession would be looked at.
While merging UBI with another bank is a possibility, ministry sources said it was not high on the agenda at the moment. These options, sources said, were ‘politically sensitive’ and would be employed only as a last resort in an election year. Zonal managers of UBI have been given NPA-reduction targets and told to submit daily reports to the two executive directors on this. From Rs 2,902 crore in December 2012, UBI’s NPAs rose to Rs 8,546 crore in December 2013. Its tier-1 capital is 5.6% versus the RBI-mandated 6.5% in March 2014.
United Bank of India (UBI) chairman and managing director Archana Bhargava resigned from her post even as the bank faces a probe by the Reserve Bank of India (RBI) and the government regarding the piling up of bad loans in the last two quarters.