PSU banks announce share-swap ratios ahead of April 1 merger

Following the footsteps of State Bank of India and Bank of Baroda, the boards of 10 public-sector banks on Thursday approved mergers and issued share-swap ratios to create four large banks in the economy.

The four anchor banks will be Punjab National Bank, Canara Bank, Union Bank of India, and Indian Bank. The merger will be effective from April 1.

Last year, Bank of Baroda took over Vijaya Bank and Dena Bank. Before that, State Bank of India (SBI) had merged all its five associate banks with itself to enter the global top 50 banks’ list in terms of size. Punjab National Bank (PNB) will merge with United Bank of India and Oriental Bank of Commerce to create the largest bank in the country after State Bank of India.

According to notifications to the stock exchanges, Delhi-based PNB will issue 1,150 shares for 1,000 shares of Oriental Bank of Commerce, and 121 shares for 1,000 shares of United Bank of India.

Mumbai-based Union Bank of India will take Andhra Bank and Corporation Bank. Union Bank of India will issue 325 shares for 1,000 shares of Andhra Bank, and 330 shares for 1,000 shares of Corporation Bank.

Bengaluru-based Canara Bank will issue 158 shares for 1,000 shares of Syndicate Bank.

Allahabad Bank said for every 1,000 shares (face value Rs 10) of Allahabad Bank, there would be 115 shares (face value Rs 10) of Indian Bank.

The Union Cabinet had approved the consolidation to build the mega banks “to create more efficient and bigger public sector banks in the challenging environment to meet the credit needs of a growing economy and to achieve operational efficiency by scale of business”. The amalgamation will lead to a wide geographical reach, technology adaption, and, more importantly, better utilisation of scarce capital.

A grievance redress system has been put in place, and a committee has been formed headed by a retired judge. If shareholders have any issue with the swap ratio — for example, if they feel they didn’t get enough time or if they need information — they can raise it. This is the board-approved swap ratio.

“After the committee receives all the grievances, it will have seven days to recommend changes, if needed, which will be the final swap ratio,” said a top official of a PSB to be merged.

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Union Bank of India Q3 net profit up

State-owned Union Bank of India on Monday reported a net profit for Q3 FY20 at Rs 575 crore as compared to a loss of Rs 1,194 crore in Q2 FY20.

Net interest income for the Q3 FY20 increased by 25.7 per cent to Rs 3,134 crore as compared to Rs 2,493 crore in Q3 FY19. Domestic net interest margin improved to 2.55 per cent as compared to 2.23 per cent in the year-on period.

The lender said its global business grew by 8.5 per cent year-on-year to Rs 7.81 lakh crore as on December 31, 2019 while total global deposits grew by 10.6 per cent to Rs 4.45 lakh crore.

Global gross advances grew by 5.8 per cent to Rs 3.36 lakh crore driven by retail segment which increased at 10 per cent year-on-year as on December 31, 2019.

The CASA (current account savings account) base increased by 57 basis points quarter-on-quarter to 34.4 per cent at the end of Q3 FY20.

Operating profit for the April to December quarter increased by 12.7 per cent to Rs 6,528 crore as compared to Rs 5,791 crore in April to December 2018.

However, gross non-performing assets (GNPAs) ratio declined to 14.86 per cent as on December 31, 2019 compared to 15.24 per cent as on September 30, 2019.

Cash recoveries during Q3 FY20 increased by 261.4 per cent to Rs 2,255 crore as compared to Rs 624 crore in Q2 FY20.

Net NPA ratio remained stable at 6.99 per cent as on December 31, 2019 compared to 6.98 per cent as on September 30, 2019. Provision coverage ratio stood at 67.42 per cent at the end of Q3.

Tier-one and common equity tier (CET)-1 capital ratio stood at 12.69 per cent and 11.35 per cent respectively.

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Union Bank of India posts net loss in Q2 due to higher provisioning for bad loans

Union Bank of India on Thursday said its second quarter net loss stood at Rs1,194 crore on account of higher provisioning.

The bank posted a net loss of Rs1,194 crore for the quarter against a profit of Rs139 crore a year ago.

Loss was higher as Bloomberg poll of 7 analysts had estimated a loss of Rs293.5 crore.

"The primary reason for the loss is divergence in provisions of Rs1,587 crore for FY19 as specified by the Reserve Bank of India (RBI). This was taken into account in this quarter," said Rajkiran Rai G., chief executive, Union Bank of India.

The bank’s loans to Dewan Housing Finance (DHFL) of around Rs2,000 crore has turned NPA in the third quarter of FY20 or in the current quarter, he added.

Net interest income, or the difference between interest earned on loans and that paid on deposits, for Jul-Sep quarter increased 16.5% to Rs2,906 crore from Rs2,494 crore in the corresponding period last year.

Other income, which includes core fee income, increased 27.10% to Rs1,143.2 crore in the three months from Rs899.44 crore a year ago.

Gross non-performing assets (NPAs), as a percentage of total advances, were at 15.24% in the September quarter compared with 15.18% in the June quarter and 15.74% in the year-ago quarter.

Post-provision, the net NPA ratio was at 6.98% against 7.23% in the Apr-Jun quarter and 8.42% in the year-ago quarter.

Capital Adequacy ratio of the bank under Basel III is 15.14% as on September 30, 2019 as against 11.43% as on June 30, 2019 compared to minimum regulatory requirement of 10.875%.

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Union Bank of India Q1 result, profit rises 73%

Union Bank of India today posted a jump of 73.3 per cent in standalone net profit at Rs 224.43 crore for the quarter ended June 30, 2019.

The lender’s profit in the year-ago period stood at Rs 129.54 crore. In the previous March quarter 2019, there was a net loss of Rs 3,369.23 crore.

Total income fell to Rs 9,887.14 crore during the June quarter 2019, as against Rs 9,908.76 crore in the year-ago period, the public sector lender said in a regulatory filing.

The bank’s consolidated net profit was Rs 230.12 crore during the quarter, compared with Rs 140.50 crore a year ago. Income rose to Rs 10,053.68 crore from Rs 10,042.29 crore.

It witnessed an improvement in asset quality as gross non-performing assets (NPAs) fell to 15.18 per cent of gross advances as on June 30, 2019 from 16 per cent by end of June 2018.

Net NPAs were down at 7.23 per cent from 8.70 per cent a year earlier. In value terms, gross NPAs or bad loans were Rs 48,841.88 crore by end-June this year, as against Rs 50,972.64 crore a year ago. Net NPAs stood at Rs 21,230.89 crore, down from Rs 25,508.46 crore earlier.

Thus, provision for bad loans fell to Rs 1,431.10 crore during April-June 2019, from Rs 1,803.17 crore in the year- ago same quarter.

Overall provisions and contingencies in the three months to June 2019 were down at Rs 1,519.34 crore, as against Rs 2,289.07 crore a year earlier.

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Union Bank of India Q4 result, net loss widens on higher provisioning

State-owned Union Bank of India Tuesday said its net loss widened to Rs 3,370 crore in the fourth quarter of 2018-19, mainly on account of higher provisioning. The company had registered a net loss of Rs 2,583.38 crore in the same quarter of the preceding fiscal.

However, the bank had posted a net profit of Rs 153.21 crore in the third quarter of 2018-19.

Total income in three months to March grew to Rs 9,621.01 crore, as against Rs 9,596.86 crore in the same period of 2017-18.

For entire 2018-19, the bank reported a net loss of Rs 2,922.35 crore on a consolidated basis, as against Rs 5,212.47 crore loss in 2017-18. Income during the year stood at Rs 39,355.38 crore, up from Rs 38,413.65 crore a year earlier.

The asset quality of the bank remained poor with the gross non-performing assets (NPAs) standing at 14.98 per cent of gross advances at March-end 2019 against 15.73 per cent as of March 31, 2018. Net NPAs came down to 6.85 per cent from 8.42 per cent.

The high level of bad asset ratio compelled the bank to make higher provisioning of Rs 5,783.09 crore for March quarter, compared to Rs 5,638.57 crore in the year-ago period.

The bank's provision coverage ratio as on March 31, 2019 stood at 66.24 per cent, as against 57.16 per cent a year ago.

As part of the risk based supervision as per RBI directive, the bank has reported divergence in gross NPAs of Rs 867 crore in 2017-18; divergence in net NPA of (-) Rs 1,414 crore and divergence in provisioning stood at Rs 2,281 crore. The adjusted net loss during 2017-18 came at Rs 6,770 crore.

Union Bank said its cash recovery and upgradation during 2018-19 increased by 188.5 per cent to Rs 6,447 crore as against Rs 2,235 crore in 2017-18.

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Round 2 of PSB merger: PNB, Union bank and BoI may get a call

The government is soon likely to invite select lenders for discussion on a second round of merger in public sector banks, according to a finance ministry official.

The lenders to be called may include Punjab National Bank (PNB), Union Bank of India and Bank of India (BoI).

We wouldn’t like to wait for too long,” said the official, indicating that some merger activity is on the cards around second or third quarter of the current fiscal year. “If the banks are not able to give options then the alternate mechanism (AM) group can make suggestions.”

In October 2018, the government had proposed the merger of three banks — Bank of Baroda, Vijaya Bank and Dena Bank — to create the country’s third-biggest lender through alternate mechanism. Both Vijaya and Dena were amalgamated with BoB on April 1, 2019.

“It need not be a tripartite merger again. We will be looking at various combinations. It has to be organic, besides we will like some of these large banks to further consolidate their balance sheets in the first two quarters,” the official said

Another government official, however, argued that it was not the opportune time for merger in state-run banks. “Bank of India has just come out of the Reserve Bank of India PCA (prompt corrective action) framework.

Union Bank of India and Punjab National Bank are also in early recovery stage,” he said.

In February 2019, the Reserve Bank of India had pulled out Bank of India, Oriental Bank of Commerce and Bank of Maharashtra from its PCA framework, which imposes certain lending restrictions on financially weak banks.

A senior executive with a PSU bank said smaller banks have begun consolidating their operations in the same geography by closing overlapping branches and focusing on niche areas.

“Merger is not the antidote for every banking woe. The government should not force mergers only to create toobig-to-fail structures,” he said.

In an interaction with ET last week, Punjab National Bank managing director and chief executive Sunil Mehta had said that his bank has now made a turnaround and can consider offers for acquiring other lenders. “It all depends on the offers,” he said.

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Union Bank of India Recruitment for Specialist Officers (SO) Posts 2019

Union Bank of India has published Advertisement for below mentioned Posts 2019. Other details like age limit, educational qualification, selection process, application fee and how to apply are given below.


Posts: Specialist Officers (SO)

• Fire Officer: 01
• Age Limit: Between 30 to 40 years
• Economist: 06
• Age Limit: Between 24 to 35 years
• Security Officer: 19
• Age Limit: Between 26 to 40 years
• Integrated Treasury Officer: 15
• Age Limit: Between 23 to 32 years
• Credit Officer: 122
• Age Limit: Between 23 to 32 years
• Forex Officer: 18
• Age Limit: Between 23 to 32 years

Total No. of Posts: 181

Educational Qualification:

• Fire Officer: B.E (Fire Engineering) from a University/Institution/Board recognized by Govt. of India/approved by Govt. Regulatory bodies /Divisional Officers course in National Fire Service College, Nagpur.
• Work Experience: Minimum 10 years as Fire Officer in Banking Industry/Fire Services with Central/State Government.
• Economist: Post Graduate degree in Economics from a University/Institution/Board recognized by Govt. of India/approved by Govt. Regulatory bodies.
• Note: Preference will be given to candidates having hands on experience in econometric packages/other data sourcing tools like Reuters, Cogenesis. Candidates should have excellent communication and writing skills. 
• Post Qualification Work Experience: Minimum 3 years as an Economist or Analyst with Financial Institutions/Banks/NBFCs/Rating Agencies/Analytics Firm/Reputed Brokerage Agencies.
• Security Officer: A graduate in any discipline from a University/Institution/Board recognized by Govt. of India/approved by Govt. Regulatory bodies.
• Work Experience: Minimum 5 years experience as an officer in Indian Army not below the rank of Captain and its equivalent rank in Indian Navy, Indian Air Force with minimum 5 years of Commissioned services. Or an officer of equivalent rank and service in Police and Central Para Military forces / Central Police Organizations.
• Integrated Treasury Officer: Graduate in any discipline and MBA / PGDM with specialization in Finance / Accounting / International Business /Trade Finance from a University/Institution/Board recognized by Govt. of India/approved by Govt. Regulatory bodies. OR CA/ICWA/CFA/FRM from a University/Institution/Board recognized by Govt. of India / approved by Govt. Regulatory bodies. OR MA (Economics) / MS (Economics) / MFC from a University/Institution/Board recognized by Govt. of India/approved by Govt. Regulatory bodies.
• Credit Officer: Graduate in any discipline and MBA / PGDBA / PGDBM/ PGPM/ PGDM with specialization in Finance from a University/Institution/Board recognized by Govt. of India/approved by Govt. Regulatory bodies. OR CA/ ICWA/ CFA/ FRM from a University/Institution/Board recognized by Govt. of India/approved by Govt. Regulatory bodies. 
• Note: Professional qualification like Financial Risk Management/Professional Risk Management will be preferred. Candidates having specialization in Econometrics will be preferred. Certificate in MS Access, SQL from Globally known organizations such as Microsoft, Cisco etc. or nationally known institute such as NIIT,CMS, APTECH etc. or institutions recognized by the Government/Government regulatory bodies will be preferred
• Forex Officer: Graduate in any discipline from a University/Institution/Board recognized by Govt. of India/approved by Govt. Regulatory bodies. AND MBA / PGDBA / PGDBM/ PGPM/ PGDM with Specialization in Finance / International Business/Trade Finance from a University/Institution/Board recognized by Govt. of India/approved by Govt. Regulatory bodies. Certificate Course in Forex conducted by IIBF will be preferred.

Application Fee:

• For General & OBC candidates: Rs. 600/-
• For  SC/ST/PWD candidates: Rs. 100/-

Selection Process: Candidates will be selected based on Online Examination / Group Discussion (if conducted) and / or Personal Interview.

Important Dates:
Starting Date of Online Application: 12th March 2019
Last Date to Apply Online: 29th March 2019
Closure for editing application details: 29th March 2019
Last date for printing your application: 13th April 2019
Online Fee Payment: 12th March to 29th March 2019

How to Apply: Interested Candidates may Apply Online Through official Website.

Application Form: Click Here

Apply Online: Click Here

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Union Bank of India reported net profit in Q3

Union bank of India has reported net sales of Rs.9572.58 crores during the period ended December 31, 2018 as compared to Rs.9438.26 crores during the period ended September 30, 2018.


Union bank of India has posted net profit of Rs.153.21 crores for the period ended December 31, 2018 as against Rs.139.03 crores for the period ended September 30, 2018.

Union bank of India ha reported EPS of Rs.1.31 for the period ended December 31, 2018 as compared to Rs.1.19 for the period ended September 30, 2018.

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Union Bank of India posts profit in Q2, sharp fall in provisions

Public sector lender Union Bank of India has posted second quarter profit at Rs 139.03 crore on sharp decline in provisions and improvement in asset quality. However, lower other income and operating income limited profitability.

The bank had reported loss at Rs 1,530.72 crore in same period last year.

Net interest income during the quarter grew by 7.4 percent year-on-year to Rs 2,493 crore with loan growth of 0.74 percent at Rs 2.93 lakh crore.

Union Bank said deposits in Q2 increased 3.4 percent to Rs 3.99 lakh crore YoY.

Asset quality improved during the quarter ended September 2018. Gross non-performing assets (NPA) as a percentage gross advances dropped at 15.74 percent against 16 percent in previous quarter and net NPA also declined at 8.42 percent against 8.70 percent in June quarter.

In absolute terms, gross advances were lower by 1.6 percent sequentially at Rs 50,157.4 crore and net advances by 3.34 percent QoQ at Rs 24,657 crore in Q2FY19.

Slippages dropped to Rs 2,667 crore in September quarter against Rs 4,652 crore in June quarter, Union Bank said, adding write-offs increased to Rs 1,868 crore against Rs 1,426 crore QoQ.

Provisions and contingencies fell sharply by 25.73 percent quarter-on-quarter and 53.43 percent year-on-year to Rs 1,655.55 crore in the quarter ended September 2018.

Provision coverage ratio also improved to 57.66 percent in Q2FY19, from 56.49 percent in Q1FY19, the bank said.

Other income (non-interest income) plunged 26.11 percent to Rs 899.44 crore due to sharp fall of 75.10 percent in treasury income YoY. Operating profit slipped 8.6 percent to Rs 1,772 crore compared to year-ago.

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Union Bank of India decided to quit one foreign branch

State-owned Union Bank of India has decided to quit Antwerp diamond hub in Belgium as the branch did not generate expected business, a senior bank official said.

The finance ministry had advised all the public sector banks to review their overseas business and close branches which are not profitable as part of strategy to conserve capital.

According to the official of Union Bank of India, the bank has already filed for the closure of the branch and process related to shutting the office is being followed. Accounts are being transferred and manpower is also being relocated as part of closure process, the official said.

The bank opened this branch in Belgium in June, 2014.

Banks have become very cautious with regard to diamond finance after the country's biggest fraud of about Rs 14,000 crore perpetrated by diamond jeweler Nirav Modi. In February, Nirav Modi and Mehul Choksi were implicated in an alleged USD 2 billion fraud, involving the use of fake guarantees from Punjab National Bank to solicit loans that rocked the banking industry.

Many other public sector banks (PSBs) plan to close or rationalise about 70 overseas operations during the current fiscal. These banks have already closed down 35 foreign operations last year.According to the data, 165 branches of PSBs are operating in foreign countries, of which 41 branches were in losses in 2016-17.

The country's largest lender State Bank of India (SBI) led the pack with nine of its overseas branches in the red. It was followed by Bank of India and Bank of Baroda with eight and seven branches, respectively. As on January 31, 2018, PSBs had about 165 overseas branches, besides subsidiaries, joint ventures and representative offices.

State Bank of India has the largest number of overseas branches (52) followed by Bank of Baroda (50) and Bank of India (29). The state-owned banks have the largest number of branches in the UK (32) followed by Hong Kong and the UAE (13 each) and Singapore (12).

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RBI imposes Rs 1 crore fine on PSBs for delay in fraud detection, reporting

The Reserve Bank of India has imposed a Rs 1 crore penalty on Union Bank of India for failing to detect and report fraud on time.

The central bank also imposed the same penalty on Bank of India and Bank of Maharashtra."This is to inform that Reserve Bank has imposed a penalty of Rs 10 million on the bank for delay in detection and reporting of fraud. The penalty has been imposed in exercise of powers vested in RBI under Banking Regulation Act," Union Bank of India said in a regulatory filing on Friday.

RBI had issued a show cause notice to the bank on January 15, 2018 asking why a penalty not be imposed on Union Bank of India under the Act. Subsequently, the bank had replied to the regulator on February 1, followed by representations on oral submission during personal hearing on April 14 before the Committee of Executive Directors of the RBI.

"The reply as well as oral submission made by the bank in the personal hearings and also additional documents furnished have not been found adequate by RBI leading to imposition of penalty of Rs 10 million," UBI said.However, the bank said that the amount of the penalty is not material considering the size of the bank. The bank further said it received communication from RBI on imposition on penalty on September 6.

The bank has taken necessary preventive measures and has implemented a comprehensive corrective action plan to strengthen internal controls and to ensure that such incidents do not recur, it added.

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Union Bank of India moves NCLT against Gammon

Union Bank of India has approached the dedicated bankruptcy court against Gammon India Ltd for a default of about Rs. 315 crore as financial woes mount on the infrastructure and engineering company. Mumbai-based Gammon India had failed to repay a term loan and interest, totalling Rs. 315 crore, to the state-run bank.

According to the bank, the infrastructure company first defaulted in October 2015. Subsequently, the lenders had initiated various methods to recover the dues, including Corporate Debt Restructuring (CDR) and Strategic Debt Restructuring (SDR).

BSE-listed Gammon India owes around Rs. 7,000 crore to its lenders, including Union Bank of India.

The company incurred consolidated net loss of Rs. 1,153.77 crore on net sales of Rs. 1667.62 crore, according to its FY17 results.

The Mumbai bench of the National Company Law Tribunal (NCLT) presided by M.K. Shrawat will hear the case on 27 September.

“The Term Loan Consortium Agreement (TLCA) was executed between Gammon India Ltd and United Bank of India as the Lead Bank and Union Bank of India on January 28, 2013,” said the lender in its petition filed in the tribunal, which was reviewed by Mint.

Gammon’s troubles began after February 2018 when the Reserve Bank of India (RBI) put an end to restructuring of loans outside bankruptcy courts and set tight deadlines for companies that are just slipping into default. It said all cases above ₹ 2,000 crore have to be settled within 180 days, failing which they have to be taken to the bankruptcy courts.

Emailed queries to Gammon, as well as Union Bank of India, remained unanswered till press time.

When contacted, Nishit Dhruva, managing partner of law firm MDP and Partners, and Prakash Shinde, partner of MDP and Partners, who is representing the bank in the dispute, confirmed the development, but refused to divulge further details since the matter is subjudice.

“It is a challenge for the lenders to find buyers for infrastructure or EPC companies as a whole, especially if there are onerous contracts in the company. However, they will get buyers for specific profitable projects of these companies,” said Ashish Chhawchharia, partner and head of restructuring services, Grant Thornton. “In most cases, the companies have little or no tangible assets and lenders’ sacrifice may be high for such companies.”

Founded in 1922 by John C. Gammon, the company was instrumental in building many landmark structures in the country, including the iconic ‘Gateway of India’, the country’s first cable-stayed bridge at Akkar in Sikkim, Hebbal flyover at Bengaluru and also India’s longest Span Cantilever bridge in Meghalaya.

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Union Bank of India Q1 profit rises 11% despite higher provisions

Public sector lender Union Bank of India has reported a 11.2 percent growth year-on-year in first quarter profit to Rs 129.5 crore, driven by tax credit and net interest income. Profit in same period last fiscal was Rs 116.5 crore.

Net interest income during the quarter grew by 17.1 percent to Rs 2,626.2 crore compared to Rs 2,242.6 crore in year-ago with loan growth at 5 percent.

Asset quality weakened for the quarter with gross non-performing assets as a percentage of gross advances rising to 16 percent versus 15.7 percent and net NPA increasing to 8.7 percent versus 8.4 percent sequentially.

In absolute terms, gross NPA increased 3.2 percent quarter-on-quarter to Rs 50,972.6 crore and net NPA 4.9 percent to Rs 25,508.4 crore for quarter ended June 2018. Provisions and contingencies fell sharply by 60.7 percent sequentially to Rs 2,229 crore, but increased 30.8 percent YoY in Q1.

Other income (non-interest income) dropped 14.6 percent YoY to Rs 1,207.95 crore while operating profit increased 1.56 percent to Rs 2,088.78 crore in June quarter. Tax credit for the quarter stood at Rs 269.83 crore against tax expenses of Rs 236.30 crore in same period last fiscal.

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Six PSBs have given mandate to IBA to Settle 11th BPS up to Scale III only

Six Public Sector Banks have given their mandate to negotiate salary of all the employees of banks. The six banks which are State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda (BoB), Indian Bank, Union Bank of India and Oriental Bank of Commerce have given conditional mandate to IBA to restrict negotiate up to Scale III or IV only.

Bank’s Union have shown their displeasure against the unconditional mandate of these banks. They have written to Department of Financial Services to relook the matter and lodged their protest against the bank’s management decision.

It’s difficult to say at this moment whether decision taken by banks are correct or not to settle salary only up to Scale III/IV in 11th Bipartite Settlement or not ?

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Union Bank of India Q4 result, reported huge loss

Government-owned Union Bank of India reported a loss of Rs 2,583.4 crore for the fourth quarter of FY18 due to near 275 percent jump in provisions for bad loans to Rs 5,639 crore.

In March quarter a year back, close to Rs 420-crore in tax write-back had helped the bank report a net profit at Rs 108.22 crore.

It had posted a net loss of Rs 1,250 crore in the December quarter due to a spike in bad loans and provisions towards accounts under insolvency. NII or net interest income (difference between interest earned and expended) fell 8 percent to Rs 2,193 crore from Rs 2,387 crore in the same quarter last year.

Gross non-performing asset (GNPA) rose to 15.73 percent from 11.17 percent in the same quarter last year. In the December quarter, it was at 13.03 percent. Net NPA for the quarter was 8.42 percent compared to 6.57 percent last year. In the December quarter, it was 6.96 percent.

Recoveries during the quarter reduced to Rs 387 crore from Rs 636 crore in the December quarter and Rs 533 crore in the year-ago quarter. A Reuters poll of equity analysts had estimated net loss of Rs 1,116.7 crore due to a jump in provisioning.

"Provisions on all the NCLT accounts have been made at 60 percent against a requirement of 40 percent requirement," said Rajkiran Rao, CEO and MD of Union Bank of India.

The provision coverage ratio (PCR) was at 57.16 percent compared to 51.41 percent a year ago.

Slippages for the quarter were Rs 10,043 crore. Over 50 percent of slippages were mainly due to the Reserve Bank of India's February 12 guidelines on new resolution framework, Rao said. About Rs 4,200 crore worth of accounts were under SDR and S4A (old resolution mechanisms) which have to be now classified as NPAs due to the RBI circular.

"We expect provisions to be around Rs 6,000 crore with an expectation of credit costs of 2 percent of total loans... that is at about normal levels," Rao added.

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Punjab National Bank(PNB) could be labelled defaulter

Punjab National Bank (PNB) could be labelled a defaulter if it does not pay the Union Bank of India about Rs 1,000 crore by 31 March, according to a media report.

PNB has to settle claims against  letters of undertakings (LoUs) issued by it earlier.

If PNB fails to do so, the Indian banking sector, already troubled by frauds, will witness an unprecedented event, where, for the first time, a bank will be "technically described as defaulter”, reported The Economic Times.

The Punjab National Bank (PNB) could be labelled a defaulter if it does not pay the Union Bank of India about Rs 1,000 crore by 31 March, according to a media report.

PNB has to settle claims against  letters of undertakings (LoUs) issued by it earlier.

If PNB fails to do so, the Indian banking sector, already troubled by frauds, will witness an unprecedented event, where, for the first time, a bank will be "technically described as defaulter”, reported The Economic Times.

“For us, it’s a genuine claim on PNB backed by documents. It is not a fraud in our books. We will take the auditor’s view. However, we don’t want to list PNB as a defaulter. We are expecting some intervention from either the government or RBI so that there is a resolution by March 31,” Rajkiran Rai, MD of Union Bank was quoted as saying in the report.

In February, state-owned Union Bank said it had an exposure of $ 300 million (around Rs 1,915 crore) to the Rs 11,400-crore PNB fraud case, but stressed that its money was safe and that it would recover it,  the PTI had reported. "The outstanding exposure related to the incident is approximately $ 300 Million and the Bank is fully secured by LoU /LC /Other documents and fully confident to receive the payment," said the Union Bank statement.

The State Bank of India (SBI) too has an exposure of at least $200 million to the PNB fraud involving Nirav Modi-helmed companies. SBI, in February, said that it had an exposure of $212 million to the PNB with respect to the fraudulent transactions, but did not have any direct exposure to Modi. “We don’t have any direct exposure to Nirav Modi, but we do have some exposure to PNB,” SBI chairman Rajnish Kumar was quoted as saying by the PTI.

Last week, Union Bank's shares fell to an over 11-year low after the Central Bureau of Investigation (CBI) registered a case against a private company for allegedly cheating eight banks, including the Union Bank, of 13.94 billion rupees. The CBI registered a case against Hyderabad-based Totem Infrastructure and its directors post a Union Bank complaint, which said the lender had been cheated of about 3.14 billion rupees.

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After PNB, SBI, now Union Bank of India hit by bank fraud

The Central Bureau of Investigation (CBI) registered a Rs1,394.43 crore bank fraud case against Hyderabad-based Totem Infrastructure Ltd on a complaint by state-run Union Bank of India.

“The CBI registered a case today (Thursday) on a complaint by Union Bank of India against Totem Infrastructure and its promoters and directors Tottempudi Salalith and his wife Tottempudi Kavita of Hyderabad,” a person familiar with the developments said.

The number of bank fraud cases has been piling up after the Reserve Bank of India (RBI) directed banks to file complaints against erring companies. The latest case comes just a day after the investigating agency filed a case of loan fraud against Kanishk Gold Pvt. Ltd on a complaint by State Bank of India (SBI).

Union Bank of India’s industrial finance branch of Hyderabad filed the complaint against Totem for cheating the bank to an extent of Rs313.84 crore.

“Totem Infrastructure took a loan from a consortium of eight banks, including Union Bank, wherein the total outstanding dues stand at Rs1,394.43 crore. This account became NPA (non-performing asset) on 30 June 2012,” the person added.

The agency said that Union Bank of India had only recently filed a complaint with the agency against Totem Infrastructure.

It was alleged in the complaint by Union Bank that “the company had diverted funds by opening accounts outside the consortium and through payments of wages by showing excess expenditure and inflated stocks. The entire sale proceeds were not allegedly routed through the dealing branches of consortium banks.”

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