Kolkata, May 6 (KNN) Faced with an RBI embargo not to extend credit above Rs 10 crore in the backdrop of its mounting losses, United Bank of India (UBI) will now focus on retail and MSMEs.
The bank’s Executive Director, Sanjay Arya said here yesterday that in the face of the financial constraints it was not advisable for the banks to go in for aggressive expansion of credit.
However, the UBI has now improved its balance sheet posting Rs 469 crore profit in the fourth quarter of 2013-14 against a big loss of Rs 1,213.5 crore in the third quarter of the previous year.
After the UBI had reached the non-performing assets of Rs 8, 146 crore at the end of December 2013, RBI had asked it not to extend loans above Rs 10 crore.
The developments had sent alarm bells in the banking circle leading to exit of its chairperson Archana Bhargava, but things seemed to be changing for better for the last few months.
Arya said that the bank would now “need to approach the Reserve Bank of India for relaxation of the embargo on credit expansion”. He however, added that time was not yet ripe to go for aggressive expansion of big credit accounts, and the focus area now was retail and MSME.