The Kolkata based United Bank of India has planned to decrease its amount of NPAs and augment its profitability by executing its well planned credit growth and recovery initiatives.
On the matter, Mr. Deepak Narang, Executive Director of the bank said that in this financial year the bank will concentrate on increasing its credit growth and improving the quality of its loans to achieve higher profits.
On plans to reduce its NPAs, Mr. Narang said that the bank is focused on decreasing the amount of its Gross NPAs to almost half of its present value in the first two quarters itself. To achieve this, the bank will concentrate its efforts on stopping fresh slippages and accelerating the recovery process.
As on March 31, 2012, United Bank's books show its Gross NPAs at Rs 2,176 crore. In the first quarter, the bank has started the process of recovering about Rs 250-300 crore and hopes to recover remaining Rs. 800 crore in the second quarter.
On this Mr. Narang elaborated, "We are aggressively pursuing recovery through the securitization route wherever possible. We have identified about 70 NPA accounts and we will take possession soon, thereby recovering about Rs 300 crore".
The bank is also considering the option of offloading the NPAs of about Rs. 350 crore to Asset Reconstruction Companies (ARC) in the coming quarter. Clarifying this he said, "In the second quarter we hope to recover about Rs 350-400 crore through our internal mechanism and another Rs 300-350 crore by offloading to ARCs".
The bank is aiming to reduce its Gross NPAs to 2 per cent from 3.4 per cent and net NPAs to 1 per cent from 1.7 per cent by the end of this financial year.