Tag: UBI

RBI imposes ₹1 crore penalty on Union Bank of India

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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1 crore on Union Bank of India (UBI) for non-compliance with certain provisions of its directions relating to fraud classification and reporting and sale of stressed assets.

The central bank, in a statement, said its inspection of UBI revealed, inter alia, non-compliance with the above-mentioned directions to the extent of (i) failure to classify an account as Red Flag Account despite presence of Early Warning Signals and (ii) failure to disclose ageing of and provisioning for Security Receipts (SRs) in its Annual Report.

RBI imposes ₹1 crore penalty on SBI

RBI had conducted Statutory Inspection for Supervisory Evaluation (ISE) of UBI with reference to its financial position as on March 31, 2019 (ISE 2019). It examined the Risk Assessment Report, Inspection Report and all the related correspondences pertaining to ISE 2019.

Following the revelations in ISE, RBI issued a notice to the bank advising it to show cause as to why penalty should not be imposed on it for non-compliance with the RBI directions, as stated therein.

RBI slaps ₹56-lakh penalty on Nainital Bank

After considering the bank’s reply to the notice, oral submissions made during the personal hearing and additional submissions made by the bank, RBI came to the conclusion that the charge of non-compliance with its directions was substantiated and warranted imposition of monetary penalty on the bank, to the extent of non-compliance with the aforesaid directions, per the statement.

RBI said this action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

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Union Bank of India inks first $1.50b sustainability-linked overseas loan

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Union Bank of India (UBI) on Tuesday said it has syndicated a “sustainability-linked loan” facility aggregating $1.50 billion for a Singapore-based global trading corporate.

The syndicated loan is of three years tenor and the coupon rate is LIBOR (London Inter-Bank Offered Rate) plus 155 basis points.

The public sector bank, in a statement, said the facility includes three Key Performance Indicators (KPIs) relating to a reduction in greenhouse gas emissions, responsible sourcing of metals and growing renewable power portfolio.

Key performance indicators

Under this structure, the interest rate paid by the borrower on the credit facilities will decrease or increase based on the group’s progress on the KPIs, it added.

The sustainability-linked KPIs will have to be tested annually and verified by a third-party expert.

UBI said sustainability-linked financing demonstrates its commitment towards environmental and responsible lending, reducing its carbon footprint, and diversifying its asset base towards renewable energy.

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Govt extends tenure of 4 public sector banks’ top officials, BFSI News, ET BFSI

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Four state-owned banks on Friday said the government has extended tenures of their top officials, including managing director and chief executive officers (MD and CEOs) of Punjab National Bank and Bank of Maharashtra.

Besides, the government has extended the tenures of executive directors of Punjab National Bank (PNB), Union Bank of India and Central Bank of India.

The government sent notifications to these banks on Thursday, informing them about the extensions given to the top-level officials.

“The Department of Financial Services, Ministry of Finance, vide its notification dated August 26, 2021, has extended the term of office of S S Mallikarjuna Rao, managing director and chief executive officer of the bank (PNB), for a period beyond September 18, 2021,” PNB said in a regulatory filing.

Rao’s current tenure was to come to an end on September 18, 2021, and the extension has been given till the date of his superannuation (January 31, 2022) or until further orders, whichever is earlier, PNB said.

The government has also extended the tenure of Bank of Maharashtra MD and CEO A S Rajeev for two years, the Pune-based lender said in a filing.

Rajeev’s current tenure was coming to an end on December 1, 2021.

In addition to this, two executive directors of PNB, two in Union Bank of India (UBI) and one in Central Bank of India have been given extension beyond their current tenures.

Sanjay Kumar and Vijay Dube, executive directors of PNB, have been given extensions till August 23, 2023 and November 30, 2022, respectively.

The terms of UBI’s executive directors — Manas Ranjan Biswal and Gopal Singh Gusain — have been extended.

Biswal’s term has been extended beyond his currently notified term, which expires on February 28, 2022, till the date of his superannuation (April 30, 2022) or until further orders, whichever is earlier, Union Bank of India said.

Similarly, Gusain’s term has been extended till the date of his superannuation, (January 31, 2022) or until further orders, whichever is earlier. His term was coming to an end on September 19.

The Department of Financial Services, through a notification on August 26, has also extended the term of office of Ashok Srivastava, executive director of Central Bank of India, the lender said in a separate filing.

His term has been extended beyond January 22, 2022, till the date of his superannuation (November 30, 2022) or until further orders, whichever is earlier, Central Bank of India said.



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Govt extends tenures of UBI, Central Bank of India’s executive directors, BFSI News, ET BFSI

Banking & Finance

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Public sector lenders Union Bank of India (UBI) and Central Bank of India on Friday said the government has extended tenures of their executive directors.

The terms of UBI’s executive directors — Manas Ranjan Biswal and Gopal Singh Gusain — have been extended vide a notification dated August 26, the lender said in a regulatory filing.

Biswal’s term has been extended beyond his currently notified term, which expires on February 28, 2022, till the date of his superannuation (April 30, 2022) or until further orders, whichever is earlier, Union Bank of India said.

Similarly, Gusain’s term has been extended till the date of his superannuation, (January 31, 2022) or until further orders, whichever is earlier. His term was coming to an end on September 19.

The Department of Financial Services, through a notification on August 26, has also extended the term of office of Ashok Srivastava, executive director of Central Bank of India, the lender said in a separate filing.

His term has been extended beyond January 22, 2022, till the date of his superannuation (November 30, 2022) or until further orders, whichever is earlier, Central Bank of India added.



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UBI update on change in IFSC code for merged banks

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Our Bureau

Union Bank of India (UBI) on Friday said the IFSC codes of the erstwhile (e)-Andhra Bank and e-Corporation Bank branches will change with effect from April 1, 2021.

Customers of the erstwhile banks will have to get new cheque books with changed IFSC and MICR codes, UBI said in a statement.

The Indian Financial System Code (IFSC) is used to identify a participating bank branch in the National Electronic Funds Transfer (NEFT) Structured Financial Messaging Solution (SFMS) message. Magnetic Ink Character Recognition (MICR) Code is used for cheque processing.

The old IFSC codes of branches of these erstwhile banks will not be valid from April 1, 2021. Andhra Bank and Corporation Bank were amalgamated with UBI with effect from April 1, 2020. The IT integration of both the banks has been completed without changing the Account number of customers.

UBI has asked customers to update new IFSC on mandates given by them and notify remitters about the same. Per the statement, the Bank has requested customers to obtain new cheque book from their branch or apply through mobile app, or Internet Banking or ATM.

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Union Bank of India reports 37% yoy decline in standalone net profit at ₹727 crore in Q3

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Union Bank of India (UBI) reported a 37 per cent year-on-year (yoy) decline in standalone net profit at ₹727 crore in the third quarter (Q3FY21) ended December 31, 2020 against ₹1,159 crore in the year ago quarter.

The public sector bank’s standalone net profit in the reporting quarter, however, was up 41 per cent quarter-on-quarter (QoQ) vis-a-vis preceding quarter’s ₹517 crore.

Rajkiran Rai G, MD & CEO, explained that, “In Q3FY20, there was a recovery in the Essar Steel account… In case of (erstwhile) Corporation Bank, they had written back about ₹1,500 crore as profit. So, that was one-off entry…that is pushing the numbers of the previous year up. Otherwise, operating performance is better this year.”

Andhra Bank and Corporation Bank were merged with UBI with effect from April 1, 2020. The bottomline in the third quarter was supported by a ₹672 crore write-back in tax expenses.

Income

Net interest income (the difference between interest earned and interest expended) was up 5 per cent yoy at ₹6,590 crore (₹6,285 crore in the preceding quarter). Non-interest income, comprising total fee income, dividend income, trading gains, recovery from technically written-off accounts, was down 18 per cent at ₹3,016 crore (₹3,667 crore).

GNPAs declined to 13.49 per cent of gross advances as at December-end 2020 against 14.71 per cent as at September-end 2020. Net NPAs declined to 3.27 per cent of net advances as at December-end 2020 against 4.13 per cent as at September-end 2020.

With proforma slippages (adjusted for the Supreme Court’s interim order), Gross and Net NPA ratio would have been 15.28 per cent and 5.02 per cent, respectively.

Non-performing asset (NPA) loan provisions were down 22 per cent yoy at ₹3,036 crore (₹3,898 crore). However, provisions for standard assets rose to ₹2,227 crore against a write-back of ₹211 crore in the year ago quarter.

Restructuring book

Rai said the restructuring book for Covid-19 related stress stood at ₹16,726 crore. Out of that ₹3,272 crore has already been restructured up to December 31, 2021. The expected restructuring ₹13,454 crore in the next six months, he added.

UBI is expecting to recover about ₹4,000 crore to ₹5,000 crore in current quarter. Of this, a chunk of the recovery is expected to come from two large corporate accounts which have been resolved under the Insolvency & Bankruptcy Code.

Rai said post-amalgamation, UBI made savings of about ₹800 crore through synergy realisation till December-end 2020. It expects savings of about ₹3,600 crore over three years.

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