Uco Bank Turnaround Talks Put Off

Uco Bank has put off discussions on its turnaround plan which was to be taken up in yesterdays board meeting.

The revival plan will now be considered in the next board meeting in the third week of next month.

However, a tentative plan for facilitating the banks recovery has been chalked out.

Regarding this plan, M M Vaish, executive director of the bank, told Business Standard that the first priority of the bank will be recovery of its non-performing assets (NPAs).

The banks total NPAs stand at Rs 1,800 crore. Against a target of Rs 180 crore to be recovered in fiscal 1997, the bank had managed to recover only Rs 40 crore till September 1996.

 

In fact, the bank had written off advances to the tune of Rs 110.98 crore as bad debts during the financial year 1995-96.

The second thrust area is that of credit and deposit advances.

At present, the banks credit and deposits are growing at a rate much lower than the industry average. The bank hopes to match the industry average in a bid to bring about a turnaround.

This is particularly important in view of the banks falling credit-deposit ratio.

Uco Bank, which recorded an increase in deposits of Rs 983 crore between September 1995 and September 1996, was able to raise its advances by only Rs 188 crore.

Third, the bank will focus on generating larger amounts of non fund-based income.

For this, the bank intends to enter into infrastructural projects guarantee business and remittances activity in a big way.

On the anvil is a larger number of bank branches for making bank drafts up to the late hours of the evening.

Last, the bank aims to keep a close watch on its overhead expenses with a view to minimising such expenses.

Vaish, however, ruled out any form of voluntary retirement scheme being opted for to deal with the 7,000-odd excess workers the bank is currently supporting.

This had been suggested by an earlier study by ICRA. But Vaish said that this will be an extremely expensive exercise costing about Rs 170 crore.