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State-run lender UBI does not see a remarkable turnaround in the bank unless industrial activity picks up in the iron and steel sector where it has major exposures.
The Reserve Bank has recently lifted ban on UBI lending.
"We have presence more in the eastern part of the country, where the major business activity is around iron and steel. Basing upon the large industries there are many small-small units. We have small exposure in all the major industries but in small units we have large exposure.
"Unless the mining, iron and steel industries comes out of the problem, it is very difficult for us to make a turn around," United Bank of India Managing Director and Chief Executive P Srinivas told PTI.
Around 58 per cent of the bank's network is situated in eastern and 17.71 per cent in north-eastern region of the country.
In March, RBI had relaxed one-year Prompt Corrective Action imposed on the bank on sanction of advances and participation in restructuring proposals, among others.
The ban was imposed in February last year following a major increase in bad loans in the quarter ended December 2013. In February 2014, the bank's then Chairperson and Managing Director Archana Bhargava took a voluntary retirement and it was headless till December 2014.
Srinivas was appointed as the new MD and CEO on December 31, 2014.
During the ban period, the bank was operating as narrow banking, taking more of deposits and investing it in treasury, and also focusing on recoveries.
Srinivas further said although the country has resources but it does not exploit and is importing raw material and finished products, which is affecting the economy.
"You have coal but you don't exploit your own coal and are importing coal. You have mines, you have iron ore and then also you are importing iron ore. You have so many iron and steel factories, and you are importing the finished goods," he said.
Srinivas said at the cost of economic activity slowly India is becoming a market, which is a risk.
"Today, it is okay but after few years when these factories die down then the market fellow will increase his rates abnormally. When you have no production capacity then you have to purchase at that rate only," he said.
Srinivas said the two bigger concerns for the bank remain slippages from restructured accounts and recovery from large accounts.
