Over the first two months of this year (January and February), state-run lender United Bank of India (UBI) was able to bring down its non-performing assets (NPAs) by ₹1,000 crore.

Gross NPAs for the Kolkata-based bank had jumped to ₹8,545 crore ( including fresh slippages of ₹3,172 crore) in the October-December quarter, from ₹2,902 crore in the corresponding quarter last fiscal.

Reduction in NPAs has been possible on account of part-recoveries from various accounts that had turned bad or post the closure of some of these accounts, Sanjay Arya, Executive Director, UBI, said.

Arya was speaking to Business Line on the sidelines of the United Bank of India Officer Employees’ Association (UBIOEA) meeting. Recoveries have been strengthened with new teams being formed for follow-up (on some of the defaulters). Regular monitoring is being undertaken too.

“We have till date brought down NPAs by ₹1,000 crore. But our main aim is to control fresh slippages,” he added.

According to Arya, most slippages have taken place in the small account category — those below ₹10 lakh.

Poor monitoring in the segment led to slippages. This apart, high exposure to the infrastructure segment and failure of sanctioned projects to take off led to loans turning bad.

Over the last six months, slippages to the tune of ₹1,500 crore came from these small accounts.

Of the ₹8,545 crore worth NPAs, nearly ₹2,300 crore (or 27 per cent) are from these smaller accounts of below ₹10 lakh.

For the quarter ending October-December, UBI reported a net loss of ₹1,238 crore.

Asset recovery According to Arya, another ₹700 crore of NPAs are likely to be sold to asset recovery companies (ARCs). Discussions have begun with some ARCs. “Sale of sticky accounts might take some time. We have begun discussions with ARCs. They will value the assets and make bids. Something might materialise by the end of March or early next fiscal,” he said.

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