Expressing dissatisfaction over the progress made by Dena Bank, the Reserve Bank of India (RBI) has called a meeting of the bank's top brass. Dena has also been classified in category C, which comprises weak banks.
Sources said RBI executive director K L Khetrapal is slated to meet Dena Bank chairman and managing director A G Joshi, executive director S C Vohra, government nominee on the board, Pradeep Kumar, and RBI nominee G Koshi on December 5 over implementation of the recommendations of two-member committee comprising UTI chairman M Damodaran and former State Bank of Patiala chief Ram Gupta.
Dena Bank chief A G Joshi termed the meeting as "routine". "Our performance has been better than the projections," he added.
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The report, submitted in April this year, had set out targets for recovery of non performing assets, speeding up of compromise settlements, accountability in case of non-achievement of targets and improvement in control mechanisms.
Against a target of Rs 32 crore recovery of NPAs in the first half, the bank has only managed around Rs 15 crore. A target of Rs 200 crore has been set for the current fiscal, of which only Rs 80 crore has been managed so far.
The bank aims to reduce its losses by 50 per cent to below Rs 150 crore this fiscal from last year's level of Rs 266 crore.
Also, the number of frauds at the bank has gone up and cases involving Rs 20-30 crore have been recorded in the last six months. The committee, set up by RBI, had also recommended that the bank should closely monitor the performance of 100 large branches to concentrate on increasing profitability. It also recommended a reduction in expenses.
Sources said the central bank is unhappy with Dena Bank's results in the first half of the current fiscal and the meeting has been called to ask the bank top brass, especially the chairman and managing director and the executive director, to improve performance.
Dena Bank reported a net loss of Rs 25 crore in the first quarter of the fiscal. The bank's operating profit was about Rs 61 crore in the last fiscal while net loss was estimated at Rs 266 crore.