The Hindu Business Line : Nicco UCO Alliance NPAs at Rs 225 cr

IN an effort to come out of the red, Nicco UCO Alliance Credit Ltd, a non-banking finance company, is trying to increase its non-fund business. It is also trying to recover a portion of its non-performing assets (NPAs).

According to Mr L.N. Kaul, Managing Director, the company has targeted an annual non-fund business of Rs 2 crore during the current financial year. Last year, its non-fund business was in the range of Rs 50-60 lakh.

Nicco UCO is capitalising on its long-term relationship with several financial institutions for increasing its non-fund businesses. For ICICI, the company will try to boost its agricultural credit line business. Similarly, for Shrachi Securities, it will work for tractor financing.

For the year ended March 31, Nicco UCO registered a net loss of Rs 44.37 crore on net sales of Rs 22.41 crore. The RBI had cancelled its NBFC licence in March.

"We are not allowed to carry any fund-based business but we are free to continue with our non-fund business," Mr Kaul told Business Line.

In May , the company moved the Union finance Ministry against the Reserve Bank order on the cancellation of the NBFC registration. A Joint Secretary in the Ministry is expected to hear the company's views soon.

According to Mr Kaul, the NBFC sector was going through a bad phase in the last few years. To make matters worse, Nicco UCO has stacked up an NPA of more than Rs 225 crore. Among the defaulters, the Madhya Pradesh Government occupies a prominent place. "We are taking steps to recover at least Rs 20-25 crore during the current financial year. With this money we would be paying off the dues of our fixed deposit holders. Income generated from non-fund business would help in meeting the working expenses," he said.

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