Rajnath Singh refuses to pinpoint blame about 'rumours' on son

Rajnath Singh refuses to pinpoint blame about 'rumours' on son

There has been some reports of Rajnath Singh's son being ticked off by PM Narendra Modi...
New Flight MH 370 theory

New Flight MH 370 theory

Malaysia Airlines Flight MH370 may have turned south earlier than previously thought

United Bank resumes lending operations

Feb 14 2014, 12:57 IST
Comments 0
SummaryMove comes amid reports of a possible capital infusion by govt to shore up the bank.

The United Bank of India has decided to lift restrictions on retail lending that it had imposed on the back of huge losses in the December quarter. Sources said a surplus fund of Rs 5,000 crore, which the bank generated during the period in which loan disbursement was suspended, prompted it to commence retail loan facilities again. Significantly, the state-run bank’s decision to start advancing fresh housing, personal and demand loans came just after reports that the government may infuse capital into it.

“The management informed officers last (Wednesday) evening through an internal email communication that they can henceforth disburse fresh housing, personal as well as demand loans,” bank sources told FE. The sources said there may be some link between the Kolkata-based bank’s decision to start advancing retail loans and the possibility of getting fresh capital from the government.

The bank had decided to suspend its loan facilities for an indefinite period after the dismal third quarter results. In the December quarter, it posted a net loss of R1,238.08 crore with gross non-performing assets (NPAs) touching a whopping R8,545.50 crore. The bank’s lending capacity deteriorated sharply due to very high levels of stressed assets as well as diminished capital adequacy.

Finance services secretary Rajiv Takru reportedly met with RBI deputy governor KC Chakrabarty on Wednesday to discuss the United Bank of India situation.

The public sector lender is currently focusing all its energies on recovery of bad loans as the Centre might wait for it to make some recoveries before further capital infusion.

“A monitoring department has already been set up for recovery. We shall soon start extensive training programmes on recovery of bad loans for our employees in every branch,” a senior bank official said on condition of anonymity.

The official said the infusion, if it happens, would shore up its lending capacity. The bank’s lending capacity has dwindled sharply as its capital-adequacy ratio at the end of the third quarter was at 9.01% under Basel-III norms, a tad above the 9% stipulation by the RBI. Moreover, its Tier-1 ratio was just 5.6% as of December 2013, below the Common Equity Tier-1 (CET1) trigger of 6.125% for Basel-III additional Tier-1 instruments and 6.5% of RBI’s minimum requirement from March, 2014.

United Bank of India was among the top beneficiaries of the government’s capital infusion plan for this financial year. It had earlier received Rs 700

Single Page Format
Ads by Google

More from Money & Funds

Reader´s Comments
| Post a Comment
Please Wait while comments are loading...