Union Bank plans to recover Rs 350 cr by September

Union Bank of India expects to recover Rs 350 crore of bad debts by September end. As on July 31, the bank's total bad debt was to the tune of Rs 1,970 crore.

M V Nair, chairman and managing director, Union Bank of India, said at a press conference today that the bank has been focussing on recovery of bad debts and has so far recovered about Rs 192 crore in the last four months.

About another initiative, he said the bank planned to raise Rs 650 crore of hybrid instruments. Nair pointed out that the bank created five asset recovery branches and put up monitoring mechanism to control the growth of bad loans.

In the case of even one to two loan installments not being paid, the account gets close scrutiny to stop it from being a non-performing asset.

During the first quarter of the current financial year, the bank has served 7,000 notices and taken possession of properties under the Sarfaesi Act ( an act which helps bank take possession of loans that have turned non performing assets).

The bank is also planning to sell its bad debt to an asset recovery company for which the bank expects to appoint a consultant soon.

Nair explained that the bank was first pursuing direct method of loan recovery rather than selling bad debts to another company as it would be able to recover larger value this way.

The bank is working on an electronic trading pricing engine to be launched in three months. The electronic trading pricing engine will help exporters and importers to have view of the foreign exchange and also provide customised rate depending on the turnover of the company.