Expect to come out of PCA framework in second quarter current financial year: United Bank of India MD

Pradhan said UBI is not growing due to lack of capital. Last year the bank got Rs 5000 crore which will help us to meet the regulatory requirements, Pradhan said

Press Trust of India April 03, 2019 18:54:32 IST
Expect to come out of PCA framework in second quarter current financial year: United Bank of India MD
  • UBI MD said that the bank is increasing the asset book by changing the risk-weighted asset portfolio

  • He said that UBI had received around Rs 4500 crore through NPA resolution during the last year

Kolkata: City-based United Bank of India (UBI), which reported losses for the last seven quarters, is expecting to come out of the prompt and corrective action (PCA) list of RBI in the second quarter of the current financial year, a top official of the bank said.

"We should be coming out of PCA by the second quarter of 2019-20. Things are happening the way we have strategised," Ashok Kr Pradhan, MD and CEO of UBI told PTI.

Pradhan said that the bank is not growing due to lack of capital. "However, the government has given us capital support. Last year the bank got Rs 5000 crore which will help us to meet the regulatory requirements", Pradhan said.

He said that the bank is increasing the asset book by changing the risk-weighted asset portfolio.

"The bank is increasing the advance book by managing the risk-weighted exposures. Earlier, the asset book was tilted towards risky assets. Now we are going for AA and AAA-rated accounts".

He said that UBI had received around Rs 4500 crore through NPA resolution during the last year. "Our GNPA should be in the range of 15 percent to 16 percent by March 2019, down from 21.27 percent earlier".

Expect to come out of PCA framework in second quarter current financial year United Bank of India MD

Representational image. Reuters

Pradhan said, "this last quarter we expect to be in profits and continue for the rest of the period quarter-on-quarter".

RBI had imposed PCA on the bank in December 2017 which had led to restrictions on lending, non-opening of new branches and non-recruitment of staff as the cost-to-income of the bank was adverse.

The advance book of the bank increased Rs 4000 crore during the last financial year with advances presently touching Rs 73,000 crore.

Pradhan said, "The target this year for advances should touch Rs 80,000 crore and deposits at Rs 1,35,000 crore".

He said that capital would be required for the growth of the bank. "We will raise capital from the market, maybe in the third quarter.

"We will also raise Rs 100 crore from the employees through Employees Stock Purchase Scheme", he said.

Since the bank is located in the east, its growth had been constrained due to lack of growth in this part of the country for which it wants to have an ambitious target.

In the current fiscal, the retail sector is expected to grow by 20 percent, MSMEs by 22 percent to 24 percent and agriculture eight to ten per cent, he said.

"We will be very selective on the corporates and to take exposure in AA and AAA-rated accounts", Pradhan added.

Updated Date:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Union Budget 2021: Govt must redirect focus on resolving demand-side issue for economic recovery
India

Union Budget 2021: Govt must redirect focus on resolving demand-side issue for economic recovery

Sunil Kumar Sinha of India Ratings warned that even if the supply-side bottlenecks get restored on account of various RBI measures it may soon run into difficulties due to the lack of adequate demand

India's GDP within striking distance of attaining 'positive growth', says RBI
Business

India's GDP within striking distance of attaining 'positive growth', says RBI

In an article about the state of India's economy, the RBI said that e-commerce and digital technologies are likely to be bright spots in India's recovery, but pre-pandemic levels of output and employment are still a long way off

2020 in review: Digital payments policy initiatives in 2020 that could have a lasting impact
India

2020 in review: Digital payments policy initiatives in 2020 that could have a lasting impact

Overall, the RBI has shown a welcome range in its focus last year, from financial inclusion, promoting innovation to easing payments in the pandemic.