Blaming wrong classification for showing assets as bad debt, United Bank of India (UBI), on Wednesday, said the software system sourced from Infosys had ‘inherent deficiencies’ in identifying quality of assets in certain categories.

The core banking solution (CBS) system of the bank was based on Finacle used by many other banks, UBI said in a filing to the BSE.

The Finacle system, it said, had “inherent deficiencies to correctly identify NPA in certain categories” of borrowers such as KCC, restructured account, overdarft account continuously overdrawn for more than 90 days, ECGC covered account, and the like, it said, adding, the deficiencies still continued in the software.

“The generation of NPA through system in September and December, 2013, has given rise to a large number of standard accounts shown as NPA and NPA account shown as performing assets,” it said.

Immediate comment from Infosys on the issue was not available.

The bank further said that the weakness of the tools used by the bank previously and also in the tool used in September and December, 2013, largely explains variation in NPA figures.

“We, therefore, clarify that wrong NPA classifications is a result of the deficiencies in the software used by the bank and the challenge of checking each asset classification manually particularly in small accounts rather than any intentional intervention at any level to hide NPA,” it said.


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