Public sector bank, United Bank of India is negotiating with various asset reconstruction companies (ARCs) to sell a part of its bad loans in order to clean up its loan book, according to a leading bank official.
The bank intends to sell bad loans valued at Rs. 100 crore by this month-end. It has already sold bad loans valued at Rs. 200 crore this fiscal. T M Bhasin, UBI’s Executive Director, said “We have received bids from ARCs to sell our bad assets. We are presently evaluating these bids and expect to sell Rs 100 crore worth bad loans by the end of this month”.
This decision was taken by the bank as a part of its advance restructuring portfolio and to lower the size of NPAs in its account books. These NPAs also include Personal Loans.
At present, gross NPA size of the bank is 2.4% and its real NPA is 1.21%, which is slightly more than its competitors.
UBI’s loan book is valued at Rs. 43,000 crore while its overall deposit-base is approximately Rs 67,000 crore.
To reduce the levels of NPA, the RBI has also said that the banks have to make more disclosure about NPAs. But CRISIL has claimed that the amount of NPAs is expected to reduce in the forthcoming months due to revival of the economy.
Get the best deals on loan offers