UCO Bank is planning to sell some of its stressed assets

Source : BL :Priya Nair:Remya Nair:Mumbai, Nov. 30.2010

UCO Bank is planning to sell some of its stressed assets as part of its efforts to improve the asset quality.

“We are looking to sell Rs 280 crore of stressed assets. Within the next 10-15 days, we should be able to finalise one deal. We will sell more of these stressed assets so that we can reduce the portfolio,” said Mr Arun Kaul, Chairman and Managing Director of the bank.

The bank will look to sell at least one more tranche in the near future, he said.

“The NPAs are slightly on the higher side. Slippages are very large. For six months, slippages are nearly Rs 1,100 crore. Gross NPAs have gone above 2.3 per cent as on September-end. So we are making a lot of efforts to improve the quality of assets”, said Mr Kaul.

He said the bank is targeting to bring down gross NPAs below 2 per cent this fiscal.

In the second quarter, a large amount of the NPAs have come from the agriculture waiver and debt relief scheme. Over the next two quarters, there is unlikely to be any abnormal slippages, Mr Kaul said.

The bank has created a separate recovery vertical that will focus purely on recovery of bad loans.

“Ordinary branches have so many other functions that have to be done. So this function gets diluted. We have created separate 5-6 stressed asset branches which will focus on recovery of bad loans. These branches will report directly to the head office, thereby ensuring quick decisions are taken,” said Mr Kaul.

These branches will handle large NPA accounts for above Rs 1 crore or so. Besides the separate branches, the bank is also planning to set up recovery camps, lok adalats and engaging recovery agents. The bank has set an internal target of Rs 1,300-1,400 crore for recovery from bad loans.

UCO Bank is also setting up specialised branches for disbursing credit to large corporates to ensure that these do not become bad loans due to bad underwriting.

“NPA creation is partly due to the skill sets available in banks. So we are creating specialised branch known as flagship corporate credit known for large corporate credit”, he said. While for the retail segment, the bank is setting up the central processing units, for more efficient monitoring.

IOB cuts NPAs in Karnataka by Rs 200 cr in first half

— G.R.N. Somashekar 
 
Optimistic of recovery:Mr M Narendra (right), CMD, Indian Overseas Bank, and Mr Ranganath, GM, Bangalore Region, addressing a press conference in Bangalore on Friday.

Source :Business line  Bureau:Bangalore, Dec 3.2010

Indian Overseas Bank has brought down its NPAs in Karnataka by about Rs 200 crore during the first half of this fiscal and it currently stands at around Rs 500 crore.

“We expect substantial recovery before March this year,” said Mr M Narendra, Chairman, Indian Overseas Bank.

Tourism projects

Addressing a press conference here, he saidthe bank's exposure to the real estate sector was around Rs 400 crore. “Recovery in this sector has been slow because of the recession and we are confident that we would be able step up the recovery soon,” he said.

Advances to real estate and housing sector in the state areabout Rs 240 crore as of September 30, 2010.

Participation in the State tourism projects, SEZs and infrastructure projects will be the focus for the Chennai-based bank during the year.

Mr Narendra said the bank was ‘interested' in participating in infrastructure projects such as steel, cement and power in the State. “We also want to tap the sugar belt in the state by opening branches in Belgaum and Bagalkot and industrial areas like Jigani and Bidadi,” he said.

Deposits, advances

The banks' total deposits in the State stand at Rs 5830 crore and advances at Rs 3153 crore. Priority sector advance is around Rs 624 crore and agricultural advances about Rs 249 crore. IOB has 83 branches and 41 ATMs in Karnataka.

The bank which has an employee pool of around 26,000 people plans to recruit about 1600 people (1100 clerks and 500 specialist officers) during the current year and about 100 new hires would be in the state, Mr Narendra said.

SBI settles 13 cases at Lok Adalat

 Source :TNN, Nov 29, 2010, 01.53am IST:PATNA:
The State Bank of India (SBI) held a two-day Lok Adalat here under the Debt Recovery Tribunal scheme. 

DGM, Network 11, Y K Lumba personally supervized the proceedings of the programme along with AGM S B Kanth and other officials. 

According to chief manager N P Singh, as many as 13 cases were settled at the Adalat which concluded on Sunday. 


The SBI recovered about Rs 3.5 crore by way of mutual settlement at the Adalat, he said, adding the SBI would continue to hold such kind of Adalats not only to recover dues from the borrowers, but also to facilitate those customers who have failed to pay dues to the bank for a long time. 

Oriental Bank of Commerce Vs. Sunder Lal Jain

Judgement dated 08.01.2008 in case “Oriental Bank of Commerce Vs. Sunder Lal Jain passed by Hon’ble Supreme Court of India against the Judgement passed in case titled 

“Sunder Lal Vs. O.B.C.” on 17.08.2005

 by the Hon’ble High Court of Delhi

The company M/s. Jain Fabric Pv. Ltd. suffered huge losses in the year 1998-99 due to natural calamity and non-payment of payments dues by the garment exporters. Consequently, the account of the Jain Fabric Pvt. Ltd. became NPA in March, 2000, however, the bank declared the said account NPA in 2001.

The Bank instead of helping the company filed false and frivolous suit before the D.R.T. and the Directors of the company were not in a position to fight the case and even not in a position to engage legal experts to fight their case before the D.R.T. at Delhi. 

The D.R.T. decreed the suit of the bank in 2003 leaving no hope for the company as the company was not even having the 75% of the decreed amount to file the appeal before the Appellate Tribunal which was necessary at that time.

That the company requested one of the counsel Mr. Bhupinder Mehtani to file a writ petition before the Hon’ble High Court against the illegal decree obtained by the bank from the DRT. 

The writ petition was filed in the month of January, 2004 and the Division of Hon’ble Delhi High Court was pleased to stay the operation of Decree subject to deposit of Rs.5 Lacs i.e. Approx. 25% of the decretal amount. 

The writ petition remained pending for about 1-1/2 year and the bank even could not file a proper reply to the said writ petition during this period.  

The Division Bench of Hon’ble Acting Chief Justice M.A. Khan and Hon’ble Mr. Justice Anil Kumar got settled the matter with the bank and directed the bank to treat the account of the company as NPA as on March, 2000 and it was further directed to the petitioner company to pay the loan amount in 8 quarterly installments within a period of two years. 

The appearing counsel of the bank as well as Chief Manager gave their consent to the said order passed by the Hon’ble High Court of Delhi, but to the shock and surprise of the petitioner company the bank preferred an S.L.P. before the Hon’ble Supreme Court for this petty matter. 

The bank was not interested in the amount, rather the ego of the senior officers of the bank was hurt and due to this prestige, they filed false and frivolous SLP before the Hon’ble Supreme Court. 

However, the Hon’ble Supreme Court was failed to appreciate the facts and circumstances of the petitioner company and passed a mechanical routine order in favour of the Bank/ government.

The petitioner also filed a review petition before the Hon’ble Supreme Court and later on a Curative Petition was also filed, but even no hearing was given to the petitioner as well as its counsel, which shows that this was the gross violation of the principal of natural justice. 

 Even the stance taken by the petitioner company was also appreciated in the Judgement in case Sardar Associates Vs. Punjab & Sind Bank, in which the Hon’ble Mr. Justice Sinha and Hon’ble Mr. Justice Deepak Verma appreciated the facts of the petitioner’s case and a reference was also made that the Hon’ble Supreme Court has not truly appreciated the facts of the case “O.B.C. Vs. Sunder Lal Jain”.  

The Bank again went back to D.R.T. for the filing of the execution proceedings and also started twisting muscles with the petitioner.  However, the able guidance and legal advise and timely steps taken by Mr. Amit Dhall, Advocate before the D.R.T., the Bank could not reply the applications filed by Mr. Dhall on behalf of the petitioner and the Bank used to take dates on one pretext or the other.

But the honesty and bonafide of the petitioner paid in the form of policy announced by the R.B.I. after the announcement of the Judgement in case titled “Sardar Associates Vs. Punjab & Sind Bank”.

 The petitioner Mr. Sunder Lal Jain, who is about 82 years old, was regularly harassed and humiliated by the bank by filing false and frivolous litigation right from the D.R.T. till Supreme Court, but as the Director of the company was very much bonafide and was always ready and willing to pay the legitimate amount to the bank, hence with the grace of God the R.B.I. announced a special policy for one time settlement for the accounts of the company under S.M.E. Scheme.

The petitioner immediately applied for taking the benefit of the said policy, but even Bank was not ready and willing to settle the same and has taken false and frivolous plea that the company of the petitioner does not fall under the category of S.M.E. Scheme, but by the sincere efforts by the Directors of the company, the Bank officials were not left with any other option, but to consider the application of the petitioner for one time settlement.

 The petitioner became victorious as the stance taken by the petitioner was accepted and the account of the petitioner company was settled under the said policy on the terms and conditions as agreed by the petitioner on the NPA doubtful amount only. 

This clearly proves that one must have patience, sincerity and honesty towards the settlement of all their loans and the bank cannot take advantage of their illegal acts in the long run.

Bank of Maharashtra lays thrust on lowering NPAs

Mr A.S. Bhattacharya

Source :Anjana Chandramouly:Parvatha Vardhini. C.:Bangalore, Nov. 21

One of the priorities for the new Chairman and Managing Director of Bank of Maharashtra, Mr A.S. Bhattacharya, would be to bring down the bank's high non-performing asset (NPA) level in the next six months.

“Our gross NPAs at 3.58 per cent may be one of the highest in the industry, and we want to reduce it to less than 3 per cent by March,” he told Business Line. He hoped to reduce net NPAs to less than 2 per cent, from the current 2.18 per cent.

NPAs were high on account of Rs 120 crore of agriculture debt waiver added during the quarter.

“And now all NPAs are system driven, and an alarm is generated by the system when any account shows signs of sickness,” he pointed out. For loans of Rs 1 lakh and below, any signs of sickness would be addressed by the branch office, while the regional office would address sickness in loans of Rs 1 lakh to Rs 10 lakh and the head office will handle loans above Rs 10 lakh.

According to him, 64 per cent of the bank's NPAs was from small and marginal borrowers, and to “arrest gross NPAs and net NPAs, we plan to set up five micro-asset recovery units in Maharashtra for the recovery of small loans,” he said. The exclusive teams will only work on recovery of these loans.

Since the bank has over 900 of its 1,500 branches in Maharashtra, these units would be set up there, and if the experiment is successful, “we will set up such units in Bangalore, Hyderabad and Uttar Pradesh,” he added.

As of now, the bank is not looking at Chennai, “but if small loan recovery does not happen in Chennai, we will set up a unit there,” said Mr Bhattacharya.

On the dip in profits in the second quarter of this fiscal, he pointed out that provisioning was doubled during the quarter to strengthen the bank's balance sheet.

The bank was also hopeful of growing its net interest margin to 2.7 per cent by the fiscal-end from current levels of 2.54 per cent. With the bank's cost of deposits at 5.24 per cent now, Mr Bhattacharya felt that it will increase as a result of the recent monetary policy.

By March, he expected it to be between 5.3 per cent and 5.35 per cent.

This would put pressure on net interest margins, he admitted, adding that the silver-lining was that the bank's yield on advances, which was 9.14 per cent during the second quarter, would increase to 9.6 per cent soon.

This would be achieved mainly by re-pricing the below-the-base-rate advances of about Rs 4,000 crore. “And this would increase our net interest margin slightly,” he said.

Shedding high-cost deposits

The bank also hoped to grow its balance sheet by shedding high-cost deposits. As on March, the bank's high-cost deposits stood at Rs 11,000 crore, which has now been reduced to Rs 6,000 crore.

The bank targets a 20 per cent growth in business to Rs 1.2 lakh crore by the fiscal-end, with targeted deposits and advances of Rs 70,000 crore and Rs 50,000 crore respectively. Mr Bhattacharya said he expected the CASA (current account savings account) ratio to touch 41-42 per cent by the year-end from the current 39 per cent.

On whether the bank would increase its base rate, “as of date, we will not increase our base rate. But it will be market-driven,” he said. The bank's base rate is 8.25 per cent now.

Auction sale of bank properties-chennai

Source :The New Indian Express,Chennai

Possession Notice-Axis bank-Chennai,