Uco Bank has chalked out a multi-pronged strategy in its drive to recover huge non-performing assets (NPA).
The Calcutta-based bank, which has an NPA level of 29 per cent at present, plans to bring it down to 12.5 per cent within three years, mainly through follow up action, bank chairman and managing director Sharda Singh said.
The bank also plans to improve and upgrade its internal housekeeping and books of accounts and also redeploy its surplus staff as part of a revival scheme.
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Regarding the follow up action, Singh said, for smaller accounts the process for debt recovery has to be initiated at the branch level with panchayats and local government administration.
Since large part of the NPA at this level comes from the borrowings made by the people under different government schemes, the local administration and the panchayat have to be involved for debt recovery, Singh said. For bigger accounts, Singh stressed on close liaison between the debt recovery tribunals and the bank so that proper follow up action and quick decisions can be taken.
The bank will also take up similar follow up action with the civil courts and inform them about various steps undertaken, Singh said. This apart the bank is also drawing out a special compromise policy to recover the dues wherever possible, Singh said, but declined to divulge any further details about the policy.
The process of debt recovery will also be initiated through a settlement recovery advisory committee headed by a retired judge and constituting of a senior banker and two general managers.
According to statistics available from Uco sources, the banks NPA are Rs 1,514 crore in 1996-97 and according to projections it is expected to touch Rs 1,043 crore by the turn of the century.
The bulk NPA also had its compounding effects on the performance of the sagging bank which suffered a net loss of Rs 236.65 crore in 1995-96 coupled with an operating loss of Rs 26 crore. This was against a net loss of Rs 83.81 crore in 1994-95 with an operating profit of Rs 36.63 crore.
In a bid to further refurbish its image, Uco authorities have initiated steps to streamline its workforce to make it more efficient and competitive.
While the bank management has ruled out retrenchment of surplus staff, they have decided to train and reorganise their workforce. In an MoU signed recently in New Delhi, both the management and the union of the bank have taken a pledge to improve customer services and to adhere to time norms while conducting business.
According to Singh, Uco authorities have already sought advice from various expert bodies to hold in-company programmes for human resource development. He said, while
discussions are on with the national institute of banking management, nothing has been finalised so far.
The per employee business in case of Uco has been Rs 45 lakh and Singh expects it to touch Rs 65 lakh within two years.
Regarding the slackening credit expansion over the last few years, Singh observed that as the deposit growth was very poor the bank had to borrow from the call money market at
very high interest rates. This resulted in the restriction of credit flow, he added.
The present credit-deposit ratio in case of Uco is around 45 per cent, Singh said.
He, however, observed that the general reason behind the slackening credit expansion is due to sluggish industrial growth and depressed capital markets.
The bank also plans to revamp the asset management committee and to set up a high-powered implementation and monitoring committee.
Singh maintained that the bank is following a judicious approach to invest their funds in various debt instruments and short term securities.
Judicious approach is necessary as we cannot afford to create bad assets, Singh said.