RBI puts United Bank of India on corrective action plan

KOLKATA: Reserve Bank of India has directed United Bank of IndiaBSE 0.00 % to raise capital, diversify credit portfolio and take cost control measures as the state-run lender is under severe stress with high sticky loans.

The central bank has also told the lender to retain whatever profit it earns without distributing it among shareholders.

"The action points focus on profit retention, capital augmentation, provision coverage, diversification of credit portfolio, ..

This is the second time in four years that UBI came under regulatory sanctions and be forced to take corrective measures for strains in financials. In 2013, RBI had restricted the bank from lending freely after the then chairperson Archana Bhargava flagged off accounting malpractices.

UBI's asset quality deteriorated further with gross NPA at Rs 12893 crore at the end of September out of total advances of Rs 68562 crore. The gross NPA ratio slipped to 18.8% making it one of weake ..