Uco To Present Npa Recovery Blueprint Tomorrow

The Uco Bank management will present a paper to the board on June 14, outlining its NPA (non-performing asset) recovery policy.

Sharda Singh, chairman and managing director of Uco, addressing the Merchants Chamber of Commerce on Wednesday, said writing off NPAs would not necessarily be a part of the proposed recovery policy.

The public sector banks NPAs, which were recorded at Rs 1,275 crore over 1995-96, are expected to come down marginally over 1996-97.

Around 50 per cent of the total NPAs is concentrated in large corporates, while the remaining half has been built around directed credit, Singh said.

He attributed the problem of NPAs to two basic factors directed credit and environmental developments.

 

Environmental developments such as the virtual closing down of the jute and engineering industries in the state have hit the banks business considerably. Private banks have an edge over public sector ones because they are not obliged to extend directed credit and instead can go for good advances, he said.

The real challenges before the bank now were to improve efficiency, incorporate technology and channelise efforts towards maximum customer service.

As part of its recently adopted turnaround strategy, the bank has identified 50-60 branches, which will be geared up to aggressively recruit lucrative customers. A target of Rs 1,000 crore has been set for advances over the current fiscal.

Trade finance, consumer finance and housing finance will be some of the key areas of focus for business. Besides, a separate housing finance cell is expected to come up in about a month.

Public sector banks have a problem of low per employee productivity as compared with foreign banks, where the per employee productivity is as high as Rs 3-4 crore, he said.

Low productivity, surplus workforce and absence of a proper work culture are some of the common problems faced by most public sector banks.

Moreover, technology constraint is another major stumbling block besides lack of expertise.