Archana Bhargava has quit as chairperson and managing director of United Bank of India with a year of her term still to run. The bank, battling record bad loans, had been earlier stopped from issuing any loans of above Rs 10 crore by the Reserve Bank of India.
She had sought voluntary retirement and her request has been accepted by the government, said Rajiv Takru, secretary, department of financial services. Executive directors, Deepak Narang and Sanjay Arya, will jointly run UBI, which became the first public sector bank in India to face a forensic audit. Non-performing assets of the bank has reached 162 per cent of its net worth by the end of December.
Following the announcement made to the stock exchanges, UBIs scrip hit a 52-week low of Rs 23.40 at the BSE. It recovered a bit later in the day to close at Rs 24.35, a gain of 0.41 per cent over the previous close. Sources said Bhargava, who took charge at UBI in April last year, had cited ill health for the reason behind her resignation.
She has reportedly been on leave since the bank announced its third quarter results on February 7. The bank posted a loss of Rs 1,238 crore for the third quarter ended December 2013 against a profit of Rs 42 crore a year ago. Bhargava has faced a stormy term at UBI on issues including misreporting of non-performing assets. Following up on the forensic audit by Deloitte, the finance ministry has ordered an administrative inquiry into the issue but has ruled out any need to merge it with another public sector bank.
The bank had, on Tuesday, sought to blame its software Finacle bought from Infosys for discrepancies in reporting of NPAs. But the software company has denied the charge. Finacle is one of the most used software by banks across the country. But immediately on taking joint charge at the bank, Narang clarified that there are no inherent deficiencies in the software.
UBIs gross NPAs rose 188.3 per cent to Rs 8,546 crore at the end of December, an addition of Rs 5,582 crore. It had Rs 2,963.8 crore of bad loans on March 31, 2013. The gross NPAs of the bank had risen to Rs 6,285.89 crore at the end of September from Rs 2,417.73 crore at the end of the second quarter of the previous financial year. The options for the bank at this