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Alleging that the public-sector United Bank of India is in bad shape due to its huge bad debt and heavy lending to big-ticket corporate borrowers, the All-India Bank Employees’ Association has urged the Union Finance Minister to take steps to put the bank back on the rails.
In a letter to the Finance Minster, AIBEA General Secretary CH Venkatachalam pointed out that the bank had made a net loss of ₹1,238 crore in the third quarter and ₹489 crore in the second quarter of the current fiscal, although the bank had made operating profits. He said the bank’s performance was deteriorating in terms of net profits, worrying its workforce and unions. “We find that this bank is tending to be more and more corporate-oriented,” the letter noted.
“We find that more than 50 per cent of its loans and advances have been extended to the large and mid-corporate (borrowers) while the priority sector lending is less than the statutory obligations. The retail sector loans of this bank are hardly 14 per cent of the total advances.”
Venkatachalam said that the main woes of the bank were ‘on account of the increasing bad loans and the bank’s inability to recover’ them. The bank’s NPAs have risen from ₹2,415 crore (3.9 per cent) in September 2012 to ₹8,545 crore in December 2013 (a rise of 10.8 per cent).
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