Concerned over the deteriorating performance of United Bank of India (UBI) for the last two quarters, All India Bank Employees’ Association (AIBEA) has sought the help of Union Finance Ministry to remove the present deficiencies and strengthen the bank.
In a letter written to the Union Finance Minister, P. Chidambaram, recently, AIBEA general secretary C. H. Venkatachalam said that the main woes of the bank were on account of increasing bad loans and its inability to recover the same.
Quoting statistics, he said the gross non-performing assets of the bank had risen from Rs.2,415 crore in September 2012 to Rs.8,545 crore in December 2013. UBI also has restructured loans of Rs.5,524 crore, of which Rs.4,815 crore are on account of the large corporate accounts. It had reported a net loss of Rs.489 crore and Rs.1,238 for the second and third quarters of the current fiscal. According to Mr. Venkatachalam, more than 50 per cent of UBI’s loans and advances were extended to the large and mid-corporates, while the priority sector loan was less than the statuary obligations and the retail sector loans were hardly 14 per cent of the total advances.
“If certain corrective steps are taken to recover the bad loans, the bank will definitely improve in its profitability. If any top officials are involved in mismanagement, stern action should be taken against them,” he said.
While urging the Centre to remove the restrictions imposed on UBI’s business operations due to its fragile capital base, he said the government should consider extending necessary capital to the bank at this juncture and the bank’s Employees Association was willing to help the bank to come out of the rut.
Pointing out that the top management was trying to create panic among the workforce by hinting about a merger with some other bank, he said the Centre should come forward and give an assurance that there was no plan for merger.
UBI has more than 2,000 branches with a clientele of more than 20 million customers and with a total business of about Rs.2,00,000 crore.