Fifteen months after imposing lending restrictions on United Bank of India for high NPAs, Reserve Bank of India (RBI) has now relaxed the rules subject to certain conditions. RBI has relaxed the Prompt Corrective Action restrictions imposed on United Bank of India on sanction of advances, participation in restructuring proposals etc subject to inter alia Bank’s CRAR not falling below 9.5% and CD ratio not exceeding 70%.
Earlier, the bank was restricted to lend more than Rs 10 crore to a single borrower and barred from participating in the restructuring stressed loans following a massive spike in bad loans in December 2013. The gross non-performing assets of the bank had touched over 10 percent, which had led to the action.
United Bank of India is one of the 14 major banks which were nationalized on July 19, 1969. After nationalization, the Bank expanded its branch network in a big way and actively participated in the developmental activities, particularly in the rural and semi-urban areas in conformity with the objectives of nationalization.
