An RBI initiated external audit report into the affairs of United Bank of India has found serious lapses on the part of credit appraisal and automated NPA detection system of the bank. According to reports, an audit team from Deloitte had examined the bank at the instance of RBI and has come out with a report which has pointed out these lapses. According to sources, the report suggests that NPAs were not being detected for few years and the automated system that detects NPAs was found switched off. The bank reported gross NPAs at 10.89% in Q3, increasing its bad loans by nearly three times. However, banking experts feel the situation does not pose any systemic risk and the regulator has directed the bank to focus on debt recovery and to stop sanctioning any fresh loans. The bank needs immediate infusion of capital but there is no chance that the funds will come from the government at this point of time. The bank posted a net loss of Rs1238 crore in Q3 compared with Rs 42 crore net profit a year ago. The bank’s tier 1 capital has fallen to 5.6%, which is below the minimum capital ratio stipulated by the RBI.