The public sector lender UCO Bank has reversed its decision to distribute sweets to the top 10 Non-Performing Assets (NPA) borrowers of the bank for Diwali this year in a statement issued on November 2.
In its latest circular, the bank said, as reported by moneycontrol, “It is hereby advised that the instructions contained in the aforesaid communication stand withdrawn.”
In a statement issued by the Recovery Department Head Office on Novermber 1, the UCO Bank said that it would distribute sweet packets to top 10 NPA Borrowers of each Branch.
“The Top Management has suggested for distribution of sweet packet to the top 10 NPA Borrowers of each Branch, in line with peer PSBs, like any other valued customers, where Branch Heads need to personally meet them, greet them on the occasion of Diwali and distribute them a sweet packet. Zonal Heads are also advised to personally meet and greet the Top 10 NPA Borrowers of the Zones on the auspicious occasion of Diwali.”
Stating that the recovery of the dues from these borrowers was not an easy task, UCO Bank said that the Branch officials were facing numerous challenges regarding the same.
“Time and again it has been observed that in general there is a deterioration in Banker customer relationship once the account turn into NPA. It is not like that each and every NPA borrower is willful defaulter and not paying the dues despite having sufficient repayment capacity. There may be certain compelling situations like business failure/loss, death of the key business persons, unavoidable circumstances etc. which also leads to the PA account turning into a NPA one. On the contrary, in some of the cases it has also been observed that only the clash of ego between the customer and Bank officials leads to the account turning into NPA.”
The Kolkata-based bank’s circular added, “We cannot deny the fact that a customer presently classified as NPA borrower was once a valued customer of the Bank.”
It said that a proper connection was necessary with such customers to bridge the gap between them and the bank.
“Such activity may also create a satiation of empathy and harmony compelling some of the borrowers to come forward for settling their account with the Bank.”
It advised all Zonal heads to ensure strict compliance with the direction.
UCO Bank is set to unveil its Q2FY24 financial results on November 3, 2023. The bank’s performance in the June quarter of the current fiscal year, 2023-2024, showed an 81 per cent surge in net profit, reaching ₹223.48 crore, in stark contrast to its year-ago figure of ₹123.61 crore.
The gross non-performing assets (GNPAs) of the bank declined from 7.42 per cent in the June quarter of the previous fiscal to 4.48 per cent. Similarly, net non-performing assets (NPAs) saw an improvement, falling to 1.18 per cent from 2.49 per cent. The UCO Bank’s Net Interest Income (NII) witnessed a substantial 21.78 percent increase, rising to ₹2,008.80 crore in Q1FY24, compared to ₹1,649.54 crore reported in Q1FY23.
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