UCO Bank Withdraws Letter for Distributing Sweet Packets to Top-10 NPA Borrowers of Every Branch!
Moneylife Digital Team 03 November 2023
UPDATED at 9.50am on 3 November 2023

After facing a backlash on social media, UCO Bank has decided to withdraw its letter for distributing sweet packets to the top-10 account-holders with non-performing assets (NPAs) in each branch for Diwali.

On 1st November, in one more example of Gandhigiri for innovative methods, UCO Bank had decided to distribute sweet packets to the top 10 account holders with NPAs in each branch for Diwali.
In a letter to all zonal heads, the recovery department of UCO Bank says, "Recovery of Bank's dues from the NPA borrowers is not an easy task and branch officials are facing numerous challenges in fields for the same. Time and again, it has been observed that, in general, there is a deterioration in the banker-customer relationship once the account turns into NPA...We cannot deny the fact that a customer presently classified as an NPA borrower was once a valued customer of the Bank."
"It is not like each and every NPA borrower is a wilful defaulter and does not pay the dues despite having sufficient repayment capacity. There may be certain compelling situations like a business failure or loss, death of key business persons, or unavoidable circumstances, which also lead to the performing asset turning into an NPA one. On the contrary, in some of these cases, it has been observed that only the clash of ego between the customer and bank officials leads to the account turning into NPA," the letter sent by Dheeraj Patwardhan, general manager (GM) for recovery and law at UCO Bank, says.
As of March 2023, UCO Bank recorded a gross NPA of Rs7,726 crore from Rs10,237 crore a year ago period. The lender's net NPA also declined to Rs2,018 crore from Rs3,316 crore in March 2022.
According to the Bank, proper connection with NPA borrowers may bridge the gap created between them and UCO Bank. "Such activity may also create a satiation of empathy and harmony compelling some of the borrowers to come forward for settling their account with the Bank."
"The top management has suggested the distribution of sweet packets to the top 10 NPA borrowers in each branch in line with peer public sector banks (PSBs), like any other valued customers, where branch heads need to meet them personally, greet them on the occasion of Diwali and distribute them a sweet packet. Zonal heads are also advised to personally meet and greet the top 10 NPA borrowers of the zones on the auspicious occasion of Diwali," the letter says.
The branches and zones of UCO Bank are mandated to send compliance reports to the recovery department by 15 November 2023.
In a letter issued on 2 November 2023, UCO Bank says instructions contained in its 1st November communication stand withdrawn.

4 months ago
This is a classic example or proof of the fact that this bank is yet to attain "maturity" and start behaving as a professional bank instead of behaving like a spoiled child of the govt. Everyone knows how and why, and under what circumstances , an NPA Customer in the first instance is advanced huge loans and on what "considerations". It is preposterous to idolise them as a former decent customer and shed tears on their current state! In fact, this is a valid ground to refer every case of NPA itemto the vigilance department immediately on its showing every sign of becoming an NPA in the near future, since there is an established history of NPA itself being a grand source of safe income for all concerned. This also is evidence of the fact that the top managements of our PSBs hardly care for RBI guidelines and lack an active/effective system of internal audit. This very Bank is too well-known for its most inhuman and indecent treatment for ordinary account holders and the misbehaviour of the officials of this bank continues unabated, while openly applauding the High Value Customers, aka the future NPAs, instead of hanging the list of such entities most prominently in every branch in the country. I only hope that the matter has been taken cognisance of by the RBI, with regard to the functioning of the internal audit system of this bank and also their statutory auditors. By the way, "recovery" of outstandings needs strong willpower and a built-in system so as to become alert and active the moment the first signs of the disease are noticed by the officials in charge.
4 months ago
SANITY prevailed ! With MITHAI Withdrawal

Now distribute 1 kg Chilli Powder to the Branch Heads & Senior Mngt. who sanctioned LOANS turning into NPAs (at expense of Tax Payers, Common Bank Account holders money)
Kamal Garg
Replied to iaminprabhu comment 4 months ago
Agreed. One kg of high quality chilli powder should be distributed to all the loan approving authorities, branch heads and senior management team for sprinkling on their faces.
Replied to iaminprabhu comment 4 months ago
Very apt advice indeed.
4 months ago
Out of 100 percentage NPAs only five percent will be willful defaulters, purposefully wanted to cheat the bank, rest all due to business failures, cheatings by the clients, and etc, if you check these 95 percentage defaulters their track record of business will be good, in India business practices, methods has to be changed, no credibility with any one, all wanted to cheat others, root cause is no proper education in moral life, we have to learn Japanese life
Replied to rajtex2303 comment 4 months ago
Financial Risk & Mngt. is the 1st thing to LEARN IN BUSINESS, to reduce failures !

CLIENTS Cheating happens due to incorrect decisions & improper Risk mitigation experience
4 months ago
Give "1 kg of CHILLI POWDER to BANK OFFICIALS" who passed these loans without through scrutiny of their Assests & Risks!

Using Common (Tax Payers) peoples money to be fritters away without ACCOUNTABILITY has become norm in PSB without affecting their jobs (performance criteria even of Branch Heads or Board Directors)!????????????????????????
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