Kolkata: Reserve Bank of India (RBI) to further relax the restrictions on the United Bank of India, which has hit the bad assets, it can give advances rating lower than ‘triple A’ if it recovers bad loans.
The regulator removed some precautions relaxed shoulders and links to state-owned lender’s ability to cash recoveries from non-performing loans, three senior bank officials said. The bank will be able to borrow double amount it recovers in cash, but the ceiling of Rs 100 crore. “UBI need to enter the norm, and start lending. Otherwise, the loan to deposit ratio will decline,” the RBI said in response to a query from the east.
UBI executive director of Deepak Narang said, ET, banks will start lending to borrowers rated below “three A” after it got some suggestions.
Reserve Bank of India allowed UBI in the first week of June to lend up to Rs 200 crore only “triple-A” grade borrowers, the fortunes of the bank net profit of Rs 469-crore compared with losses at the end of March through the issuance of rupees, Rs 1,238 crores in the fourth quarter of last year.