State-owned UCO Bank has not been able to make an analytical study of its asset quality even after the end of the loan repayment moratorium period on August 31, heeding a Supreme Court directive that no accounts shall be downgraded for now, an official said.
On September 3, in a relief to stressed borrowers who are facing hardship due to adverse impact of the COVID-19 pandemic, the top court had said that accounts which were not declared as non-performing assets till August 31 this year, shall not be declared NPA till further orders.
The top court had also earlier expressed its reservation over the idea of ''charging interest on interest'' from those borrowers who were willing to avail of the loan repayment moratorium, a facility extended by the Reserve Bank of India during the pandemic times. UCO Bank MD and CEO A K Goel had earlier said the lender would like to ascertain its asset quality, once the moratorium period ceases on August 31.
"We are not able to carry out that exercise as the top court has directed that no accounts will be downgraded till further orders," Mr Goel told PTI.
With the RBI guidelines, the lender has started an exercise of making a list of eligible borrowers whose accounts could be restructured with the rider that they should not have any overdue for 30 days as on March 1, 2020. He said the bank has already obtained the board approval for this purpose.
Mr Goel said the lender has already prepared a standard operating procedure to identify accounts which are really affected by the COVID-19 crisis. "If borrowers are really affected by job loss or salary cut, then the bank will go all out to lend them a helping hand," he said.
According to him, the bank would ask for salary slips of February 2020 and also that of August 2020.
Asked about the credit off-take growth, Mr Goel said it was almost "negligible" in the first quarter of the current fiscal. As the economic activities are picking up, the credit off-take during the remaining period of the fiscal will be good, he said.
Asked about the time frame for taking the bank out of the Prompt Corrective Action (PCA) framework of RBI, he said, "We are waiting for the regulator to take a call."
The levels of non-performing asset and capital adequacy ratio at the end of the first quarter of the current fiscal would enable the bank to be out of the lending constraint purview, he added.
Meanwhile, the Kolkata-headquartered lender has secured the approval of its board of directors and shareholders to raise Rs 3,000 crore this fiscal. The bank said the money would be required for growth and provisioning of bad loans.
The bank had posted a net profit of Rs 21.46 crore in the first quarter of the current fiscal.