Unwilling to be idolised for taking the decision to declare Vijay Mallya and Kingfisher Airlines as a wilful defaulter, United Bank of India (UBI) Executive Director Deepak Narang said that while he merely did his part of the job as a banker, he was hoping that it would send a message to corporates that UBI would not spare any defaulter.
“My bank will not leave any wilful defaulter,” he said while talking to The Hindu .
Exactly a week ago, UBI had created banking history of sorts by declaring Vijay Mallya and three directors of Kingfisher Airlines as wilful defaulters.
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He said that whatever be the eventual outcome of the entire affair (flowing from the declaration), he was willing to learn from it and move forward.
UBI had taken the step in line with the master circular issued by the Reserve Bank of India on wilful defaulters. He, however, declined to show his hand on his future plans (on declaring more borrowers as wilful defaulters).
UBI has listed some 405 companies and their directors as wilful defaulters. This includes only a few big names. Most of UBI non-performing asset is on account of the MSME sector.
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Mr. Narang, along with Sanjay Acharya, also an ED, has been steering UBI since the erstwhile chairman-cum-managing director Archana Bhargava quit office in February 2014, leaving the bank steeped in a Rs.1,200-crore quarterly loss and a mountain of non-performing assets.
UBI, which was in the black till the first quarter of 2012-13, reported a Rs.489.5-crore loss in the second quarter, which ballooned to Rs.1,238.1 crore by the third quarter.
UBI’s problems were traced to its mounting bad loans, much of which went unreported. Most of these NPAs were in the sub-Rs.10 crore category. The state of affairs came to light following a review by the RBI, which, along with Deloitte, launched a forensic audit of the bank’s books.
Answering a query on the whys and hows of this state-of-affairs cautiously, Mr. Narang said that there seemed to be some deficiencies in the tool of reporting NPA. While the software of a reputed IT company was in use, available information suggested that “manual culling of the data from the software had caused errors”.