Uco Board Rejects Directive To Delegate More Powers

The finance ministry in December 1995 amended the Nationalised Banks (Management & Miscellaneous Provisions) Scheme of 1970 to recast the management committee in nationalised banks and broadbase it. The idea was to reduce the bank's dependence on boards and give greater authority to the management committee for faster decision making. Uco chairman has already moved the finance ministry on the board's refusal to part powers with the management committee. The RBI governor is also believed to have been apprised of this peculiar development.

Since the chairman is on a one-month extension for the third time after his term came to an end and the board has refused to part powers with the management committee, no important decision can be taken, a highly-placed industry source said.

 

Confirming this, one senior Uco executive told Business Standard, The corporates are planning to leave the Uco fold as the bank is not willing to raise their credit limits. On the recovery front, the scene is even worse as the board. Uco Bank, which had posted an operating profit in 1994-95 after a gap of five years, plunged deep into red last year registering a Rs Rs 236.66 crore loss.

Under the amended scheme, called the Nationa-lised Banks (Management and Miscellaneous Provi-sions) Scheme of 1995, the management committee has powers to sanction all credit proposals and investments by the banks in government securities and shares and debentures of all companies.

The committee is also empowered to exercise its authority in regard to loan write-offs, proposals for approvals for capital and revenue expenditure, filing of suits and defending them. Prior to>