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United Bank of India (UBI) on Tuesday said the ministry of finance had nominated Parvathy V Sundaram in place of Surekha Marandi as representative of Reserve Bank of India (RBI) on the board of directors of the bank, with immediate effect. Sundaram has also been inducted as member of the audit committee of the board.
Both Sundaram and Marandi are chief general managers at RBI.
Earlier, RBI had written to the finance ministry on the steps needed to turn around UBI. One was to permit the central bank to supersede the board of the state-run lender. The finance ministry has also been keeping a close watch on the performance of UBI and has directed its executives to submit a daily report on bad loan recoveries.
The bank’s loan sanctioning power has also been capped at Rs 10 crore, pending further instructions.
UBI closed the third quarter with gross non-performing assets (NPAs) of Rs 8,546 crore. Fresh slippages topped Rs 3,000 crore, while the bank’s net loss doubled from a quarter ago to Rs 1,238 crore in the October-December period.
The Central Vigilance Commission had also sought details on some of the loans disbursed by the bank in the recent months.
The post of chairman and managing director at UBI is lying vacant after the resignation of Archana Bhargava, who opted out because of health issues.
Base rate cut
Separately, UBI said it had decided to reduce its base rate or minimum lending rate by 25 basis points with effect from March 24. The revised base rate will be 10.25 per cent.
Only a month ago, the bank had increased its base rate by 25 basis points to 10.50 per cent and reduced its one-year and above term deposit rate by an equal amount. The move, the bank had said, would allow it to improve its margin and profitability. It did not offer any reason for again to paring its lending rate.
