United Bank board to review NPA data goof-up tomorrow

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SummaryUnited Bank of India is holding a Board meeting on February 22 to discuss whether there was a ‘mala fide’ intent on the part

United Bank of India is holding a Board meeting on February 22 to discuss whether there was a ‘mala fide’ intent on the part of its officials that led to a pile-up of bad loans.

Sources said the agenda for the meeting includes a strategy to recover from the ongoing crisis — with short, medium and long-term goals — in addition to a discussion on the audit report by consulting firm Deloitte that found fault with the bank's early warning system to detect risks and staff inefficiency that led to a rise in NPAs.

Besides, the board will look into the controversy surrounding the bank blaming the ‘deficiencies’ in Finacle ‘core banking software’ of Infosys for incorrect classification of its NPAs and the IT major's claim that Finacle "has the proven ability and framework required to address asset classification and NPA reporting" as per RBI norms.

"These matters will be taken up. But the main issue will be how the bank can recoup losses recovering the bad loans and overcome the crisis," said a source.

According to finance ministry sources, the crisis at the bank will not result in any systemic risks. However, the ministry wants the bank to come clean on the allegations of misreporting NPAs.

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