Dena Bank On Recovery Path, Says Chairman

Dena Bank, whose performance will come under the Reserve Bank of India (RBI) microscope tomorrow, has managed to pare its net loss to Rs 25 crore in the half year ended September 30 against the targeted net loss of Rs 45 crore set as part of its recovery plan.

Last fiscal, the bank posted a net loss of Rs 266 crore and has indicated to the Union government that it will bring down the net loss by 50 per cent by pursuing recoveries aggressively and bringing down the cost of deposits.

The beleaguered bank, whose fortunes have been on the downturn in the last couple of years, is currently pursuing a three-pronged strategy of focussed recovery through debt recovery tribunals and compromise settlements, paring cost of deposits as also pruning the expenditure. Its brass has been called for a meeting by the RBI to review financial health in the half-year ended September 30, 2001.

 

"We are on course as per the revival plan submitted to the Central bank. As against a cash recovery target of Rs 58 crore projected in the first half, the bank has made recoveries of Rs 91 crore and has also brought down cost of deposits to 7.28 per cent in the reporting half as against 7.74 per cent in the corresponding half in 2000-01," said A G Joshi, chairman and managing director of the bank.

Dena Bank's deposits (liabilities) have grow by six per cent in the reporting half. On a year-on-year basis, the rise is about 12 per cent. It has set a conservative non-performing assets recovery target of Rs 200 crore via cash (compromise) settlement and restructuring of loans considering that in view of the current economic slowdown recovery is going to be an uphill task. The bank's gross non-performing assets (NPAs) is currently pegged at Rs 1,946 crore. During the reporting half year, Dena Bank has upgraded 25 borrowal accounts.

RBI executive director K L Khetrapal has called a meeting with Dena Bank chairman and managing director, its executive director S C Vohra, the government and RBI nominees on the board Pradeep Kumar and G Koshy, tomorrow to review implementation of the recommendations of a two-member committee comprising Unit Trust of India chairman M Damodaran and former State Bank of Patiala managing director Ram Gupta on reviving the bank.

The committee, in its report submitted in April 2001 to the RBI, had set out targets for recovery of NPAs, speeding up compromise settlements, accountability in case of non-achievement of targets and improvement in control mechanisms.