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United Bank of India (UBI) today said it has filed a winding up petition against REI Agro for failing to repay Rs 224 crore loans it has borrowed from the bank.
The state-run lender has been making efforts to recover money from REI Agro, which processes and markets basmati rice, and was contemplating putting it in its list of willful defaulters, senior executives of the bank told Business Standard requesting anonymity.
"The bank has filed the winding up petition under section 433, 434 and 439 of the Companies Act, 1956 against REI Agro vide petition number 436 (of 2014) in the High Court at Kolkata," UBI said in a notice to the Bombay Stock Exchange(BSE).
The state-run lender has stepped up its loan recovery efforts following losses in two successive quarters. The bank made cash recovery of Rs 645 crore and upgraded Rs 1,488 crore non-performing loans to standard assets in January-March period. This allowed the lender to reduce its bad loans, pare provisions, and earn a net profit of Rs 469 crore in the fourth quarter.
UBI aims to cut its bad loans by Rs 1,600-2,000 crore in the current financial year. UBI closed January-March quarter with Rs 7,118 crore gross bad loans.
