You are here: Home » Finance » News » Others
Business Standard

UBI plans to rejig SME loans, capital

BS Reporter  |  Kolkata 

S C Gupta

In tune with the Reserve Bank of India’s (RBI) policy of restructuring loans for small and medium exnterprises (SMEs), Kolkata-based public sector lender United Bank of India (UBI) is planning to restructure loans for the SME sector. The bank’s total SME portfolio at present is Rs 3,100 crore.

The UBI’s board today also approved its long-pending capital restructuring plan, under which its paid-up capital will come down from Rs 1,532 crore at present to about Rs 226 crore. The bank is also mulling to return the remaining capital to the government.

The restructuring would be complete by the end of this financial year, said S C Gupta, chairman and managing director of UBI, at an interactive session at Merchants’ Chamber of Commerce in Kolkata today.

The bank is also planning to raise Rs 1,000 crore through a perpetual non-convertible issue this year.

Under the loan restructuring plan for SMEs, the bank will provide additional and reduce margin and security requirements for SME advances, said Gupta.

The efforts are a part of a comprehensive package for the SME sector, whereby the bank may also offer loans at 1 per cent discount.

“Even if some accounts are non-performing, but viable, we will see that they are brought back to health with some support from the bank,” said Gupta. The move is aimed at reducing the bank’s net NPA level, which currently is 5 per cent for the SME sector and 2 per cent overall.

The bank hopes to bring down the NPA level by half a per cent by March 2009.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sun, December 14 2008. 00:00 IST
RECOMMENDED FOR YOU
.