Asheesh Pandey joins Bank of Maharashtra as executive director

State-owned Bank of Maharashtra (BoM) on Friday said that Asheesh Pandey has joined as an executive director.

Prior to joining BoM, Pandey was chief general manager and chief operations officer (COO) at Union Bank of India and has a progressive professional career spanning more than 24 years. The bank said he has handled a diversified portfolio ranging from credit, credit monitoring, treasury and merchant banking, foreign transactions and joint ventures, marketing and customer relationships and banking operations.

“Asheesh Pandey is a mechanical engineer (Hons) with post-graduation in management (Hons) with specialization in finance and marketing. He is a certified associate of Indian Institute of Bankers, also holds NSE certification in insurance (both life and non-life), mutual funds and de-mat operations," it said.

The statement said that as chief general manager and COO of UBI took up the challenging role of the amalgamated entity during which the various process of re-engineering, harmonization, automation and digitization taken place.

He was a general manager of the credit monitoring and restructuring department of Union Bank of India during which the department had a complete overhaul in terms of monitoring and management of the bank’s credit portfolio by deploying data analytics.

Source : Livemint

SBI, Union Bank to go ahead with Swiss Challenge auction for KSK Mahanadi Power loans

State Bank of India and Union Bank of India have decided togo ahead with the Swiss Challenge auction for the KSK Mahanadi Power loans next week despite observations by income tax officials last week that this method is opaque, implying an unholy nexus between the promoters and the asset reconstruction company, said people aware of the matter.

In the Swiss auction process, lenders first hold an auction of the NPA, and the offer made by the highest bidder (also known as anchor bidder) is set at a reserve price. Subsequently, they hold yet another auction, inviting bids at higher than reserve price, but the anchor bidder will get an opportunity to match the best bid.

SBI and Union Bank have invited bids for Rs 4101 crore and Rs 1773 crore respectively from ARCs, which is the largest auction of a single loan till date.

Four ARCs – Omkara ARC, CFM ARC, Rare ARC and Invent ARC - were raided on December 8 by income tax department which claimed that the Swiss challenge method for selling loans is opaque in nature and that defaulting borrowers can regain control of their companies by funding the ARC using the hawala route, ET reported.

Several commercial banks that spoke with ET disagreed with the allegations raised by the income tax department but declined to be named on apprehensions of being questioned by investigative agencies. Officials from the ARC industry too declined to comment on record.

“At present, the quickest way to recover dues is selling NPA to ARCs since it is a transparent and time bound process. In fact, all other mechanisms have failed,” said a senior official from a large commercial bank. Lenders also say that sale of NPAs to the ARCs is undertaken only after they have exhausted all other recovery options.

“At present, the two feasible options to resolve distressed debt are one-time settlement (OTS) and sale to ARC. IBC is no longer an attractive option since National Company Law Tribunal takes at least a year to get a company admitted to bankruptcy proceedings and another two years to conclude resolutions,” observed another lender.

An OTS would involve a haircut and giving existing management a second chance to revive the company. Recovery through Debt Recovery Tribunal and Securities and Reconstruction of Financial Assets and Enforcement of Securities Interest Act is also uncertain and not time bound. In fact, the posts of chairmen of all five Debt Appellate Recovery Tribunal and 15 NCLT judges are vacant, severely affecting recoveries for lenders.

The key allegation made by the income tax department is centred on whether a fair process is followed by ARCs to acquire the stressed loans and if the ARCs are evading taxes, said a senior official from a consulting firm.

Often there is difference between lenders and ARC on pricing of the loan, but banks no longer sell loans bilaterally, a senior official from an ARC said. The Reserve Bank of India has directed banks to use the Swiss challenge method for sale of distressed loans. Even the assets that lenders propose to sell to the National Asset Reconstruction Company of India will be through the Swiss auction.

However, the income tax raids on the four ARCs raised concerns about banks selling loans at a throwaway price benefitting the defaulter to regain control over the assets. However, lenders argue that the reserve price of loans for sale is based on the valuation of loans by external agencies, which eliminates the scope for subjectivity while officials from ARC say that the IBC regulation prevents them from selling the assets back to the promoter.

Source : Economic Times

RBI imposes Rs1 crore penalty on Union Bank of India

The Reserve Bank of India has imposed monetary penalty worth ₹1 crore on Union Bank of India for failure to classify an account as fraud and delay in disclosures in the annual report. In a press release on Monday, the regulator said that the bank had been penalized for non-compliance with the certain provisions of directions issued by RBI contained in “Reserve Bank of India (Fraud - Classification and Reporting by commercial banks and select FIs) Directions 2016" and “Guidelines on Sale of Stressed Assets by Banks.  

“The Statutory Inspection for Supervisory Evaluation (ISE) of the bank was conducted by RBI with reference to its financial position as on March 31, 2019 (ISE 2019) and the examination of the Risk Assessment Report, Inspection Report and all the related correspondences pertaining to ISE 2019, revealed, inter alia, noncompliance 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," it said. 

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 the aforesaid RBI directions was substantiated and warranted imposition of monetary penalty on the bank, to the extent of non-compliance with the aforesaid directions, the regulator added.

Source : Livemint

Union Bank of India ranks third in PSB reforms

Union Bank of India ranked third amongst 12 PSBs in EASE 4.0 Reforms Index for Q1 FY22, as per the rank list released by Indian Banks’ Association (IBA). The Bank has been actively adopting the reforms initiatives recommended under the EASE Agenda enabling it to retain the overall position of Second Runner Up from the last three consecutive quarters since December 2020.

Union Bank of India also recorded stellar performance under four out of six themes in the Agenda. Union Bank of India has been adjudged winner in the themes ‘Collaborating for synergistic outcomes’ & ‘Governance & outcome-centric HR’ and bagged Runner-Up positions in ‘New age 24x7 Banking’ &‘Tech-enabled ease of Banking’ themes.

Enhanced Access & Service Excellence (EASE) is an initiative by the Department of Financial Services (DFS) as part of the PSB Reforms Agenda and is currently under its fourth iteration which focuses on Collaborative Banking and the Digital Transformation of the PSBs.

Source : Livemint