RBI: Ensure Corporate Governance In Public Sector Banks

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KOLKATA: Reserve Bank of India has written to the government to ensure corporate governance in public sector banks in the light of what happened in United Bank of India.

BankThe Kolkata-based UBI was in a midst of a crisis last couple of months after its sticky loans rose to 11 per cent of total loans while its management was seen fighting over the classification of loans. The sudden resignation of UBI chairperson Archana Bhargava raised eyebrows too.

“It was a corporate governance issue. It’s not only UBI, many other banks face such issues,” deputy governor KC Chakrabarty said.

The government is the majority shareholders in UBI and other public sector banks.

UBI’s gross non performing assets rose nearly three times to Rs 8546 crore at the end of December 2013 from Rs 2,902 crore a year ago. Gross NPA was Rs 6286 crore at the end of September.

The gross NPA ratio jumped to 10.82 per cent , the worst in the industry, from 7.52 per cent at the end of the previous quarter and from 4.42 per cent a year ago.

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