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Uco Bank to recast operations to become 'lean and mean'

Calcutta-based Uco Bank has approached the Reserve Bank of India to seek permission to restructure its operations to emerge as a 'lean and mean organisation', top bank officials said in New Delhi.

(The bank was recently in the news when a CII taskforce recommended its closure to the government on the issue of non performing assets or NPAs.)

The state-owned Uco Bank will soon merge its 14 zonal offices into four local head offices located at Lucknow, Delhi, Madras and Bombay. The RBI is expected to take away the zonal licences and give approval for the LHOs by the end of this fiscal, the officials said.

The LHO which will absorb the employees from the zonal offices, will be headed by a general manager, assisted by five assistant general managers and a dozen operating officers. The LHO will be delegated a lot of powers to make credit sanctions upto Rs 50 million, effect transfers of officers and clerks and settle credit-related disputes.

However, the policy planning would continue with the head office.

The Uco Bank is undertaking the restructuring exercise based on the reports submitted by rating agency Icra Limited, consultants Batliboi and Company and Pune-based National Institute of Bank Management.

The bank expects to have a net profit this fiscal with the operting profits already at Rs 400 million as against marginal operations profits of Rs 1.7 million in 1998-99.

Moreover, the bank is also merging the operations of its branches which are in proximity to each other in Bihar, West Bengal, Himachal Pradesh and North Eastern states. It has merged eight of its branches in the northern region last fiscal.

At the same time, the bank employees have launched a massive drive to recover doubtful loans. ''We have two teams of officers visiting our defaulting loanees even at odd hours to recover the bad debts.''

The bank has targetted the recovery of Rs 250 million NPAs this fiscal against the total NPAs of Rs 1 billion in the northern region.

The bank has aggressively taken up the loan recovery cases with debt recovery tribunals, local courts and lok adalats, the officials said.

Meanwhile, the bank has given in-principle sanction for Rs 3 billion to power major National Thermal Power Corporation, Rs 2 billion to National Hydro Power Corporation. ''We have also sanctioned Rs 1 billion to Hudco at a concessional interest rate of 12.5 per cent as part of priority sector lendings,'' an official said.

The cost of funds for the bank is less than eight per cent as most of its branches are in the rural areas which attract a high rate of fixed deposits.

According to top Uco Bank officials, the organisation's systems are Y2K-compliant and adhere to norms laid down by the British Standard Institution Technical Committee.

The bank has spent over Rs 150 million on its Y2K preparedness which includes a complete contigency plan and third party audit.

UNI

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