Archana Bhargava: A curious exit?

Ministry accepts VRS request; UBI chairperson Bhargava quits citing health reasons

Public sector bank chiefs are not known to opt for voluntary retirement. However, Archana Bhargava, chairperson and managing director of United Bank of India (UBI), decided to buck that trend when she applied to the finance ministry on Thursday for the same.

Her application was promptly accepted by the ministry, which has now put the two executive directors — Deepak Narang and Sanjay Arya — in charge of the beleaguered state-run bank, in an interim arrangement.

This puts an end to Bhargava’s short stint at UBI, of about 10 months, during which the bank saw losses mounting, credit quality worsening and capital adequacy depleting.

Bhargava was appointed chief of the state-run lender on April 23, 2013, and was supposed to be in charge till February 28, 2015. Prior to this appointment, she was one of the executive directors in Bangalore-based Canara Bank.

A postgraduate gold medallist from Miranda House, University of Delhi, Bhargava started her career with Punjab National Bank (PNB), where she joined as a management trainee in 1977. At PNB, she worked in various key areas, including large corporate credit, priority sector, planning and development, and financial inclusion.

Becoming the executive director in Canara Bank in April 2011, Bhargava led the bank’s international banking, large corporate credit, priority sector, risk management, inspection and audit, general administration, financial management and various other departments. She also looked after all the nine subsidiaries of Canara Bank.

At UBI, she announced an ambitious plan of expanding its presence in seven or eight new countries. However, that plan was kept on hold, as the bank’s earnings fell due to a sharp rise in non-performing assets (NPAs).

In her first quarter in charge of UBI, the bank’s net profit fell 74 per cent from a year earlier. For the next two quarters, the lender incurred a net loss of Rs 489.5 crore and Rs 1,238 crore, respectively. To add to the problem, the lender’s capital adequacy ratio crashed to 9.01 per cent, according to Basel-III rules at the end of December 2013. Tier-I capital adequacy ratio was 5.59 per cent and well below the regulatory requirement of 6.5 per cent, which banks need to maintain from March 2014.

Fresh slippages topped Rs 3,000 crore, expanding the lender's gross NPAs to Rs 8,546 crore at the end of the last quarter.

There was talk of a growing rift between Bhargava and other senior executives of the bank over asset classification and reporting of NPAs. Following the bank’s third-quarter earnings announcement, Bhargava went on leave and has now left the bank altogether.