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UBI in further trouble

A Delhi branch of the crisis stricken United Bank of India is suspected to have disbursed Rs 800 crore without sufficient collaterals. Two bank officials revealed this to newspersons even as the chairperson of the bank Archana Bhargava resigned citing health reaons. The government has already told the bank to fix responsibility for the state of affairs in the bank and a forensic audit by an external agency into the bank’s finances has revealed that there has been no systematic monitoring of sticky accounts, which led to the bank’s NPAs go up beyond the accepted levels to a high of 10.8% and losses reported in two straight quarters. A team of officers from the head office of the bank in Kolkatta have been sent to Delhi to carry out investigations into the sanctioning of the loans. The branch concerned is said to have sanctioned lines of credit worth Rs 800 crore to around 150 accounts against bills that were discounted without verifying the underlying physical goods. With the CMD quitting, the government, which 88% holding in the bank, is preparing a turnaround plan for the bank and the day-to-day affairs have been entrusted to the two EDs of the bank.

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