Public sector lender United Bank of India aims to cut its gross non-performing asset (NPA) ratio to around 8% by the end of the current financial year.

While the bank did see some improvement in asset quality in the March quarter last fiscal, at the end of March 31, 2015, its gross NPA ratio — gross NPAs as a percentage of gross advances — stood at 9.49%, still among the highest in the Indian banking industry.

“In the first quarter this fiscal, we may not do very well in reducing the gross NPA ratio. From the third quarter, the real pick-up (in cutting NPAs) will take place. Ultimately, we aim to reach a level of around 8% by FY16-end,” United Bank of India MD & CEO P Srinivas told FE. “To bring down the gross NPA ratio, our advances have to go up and, also, we have to ensure that no further great slippages happen. Then, we have to recover bad loans,” said Srinivas.

He said the lender aimed to reach about R76,000 crore in total advances by the end of this fiscal, clocking a 10% y-o-y growth.

Total advances at United Bank stood at R69,070 crore in FY15, a y-o-y growth of just 1.6% on the back of RBI’s restrictions on lending. The central bank, however, recently removed the curbs imposed on the bank in December 2013 following a massive surge in bad loans.

Srinivas said employees of the bank would continue to hit the streets and organise silent protests at the residence and workplaces of defaulters to recover bad loans. The bank has resorted to this tactic since January this year, with positive results.

During the fourth quarter, the bank brought down its gross NPAs, in absolute numbers as well as percentage terms.

The gross NPA ratio declined to 9.49% at the end of March quarter last fiscal against 10.47% in the corresponding period of the previous fiscal. In absolute terms, gross NPAs during the quarter were R6,552.91 crore against R7,118.01 crore in the year-ago period.

The bank also plans to approach RBI for branch expansion this fiscal as the latter has withdrawn restrictions towards this as well. “RBI has asked us to come up with a plan. In this quarter, we will plan thoroughly for the branch expansion and approach the central bank for its approval,” said Srinivas.

For Updates Check Banking News; follow us on Facebook and Twitter