IDBI Bank, Indian Overseas Bank and UCO Bank to open in red

The Reserve Bank of India (RBI) has put four public sector banks under watch on account of increasing bad loans. The list of banks which are under the scanner, are IDBI Bank, Indian Overseas Bank and UCO Bank. At the same time, name of the fourth bank has not revealed yet.

These banks which are under watch have not improved on asset quality after the central bank's asset quality review (AQR), which comes to an end on March 31. RBI had embarked on the AQR exercise from December 2015 and asked banks to recognise some top defaulting accounts as non-performing assets (NPAs) and provide for them.

On the financial front, IDBI Bank’s gross npa stood 15.16 per cent to Rs 35245 crore and net npa of 9.61 per cent to Rs 20949 crore in Q3FY17. Indian Overseas Bank’s gross npa stood 22.42 per cent to Rs 34502 crore and net npa of 14.32 per cent to Rs 19901 crore in Q3FY17. UCO Bank’s gross npa remained at 17.18 per cent to Rs 22181 crore and net npa of 8.99 per cent to Rs 10545 crore in Q3FY17.

The lenders have been advised by both the Finance Ministry and the RBI to improve their financials, look for paths for capital infusion and create a self-sustaining model by selling assets.

The share price of IDBI Bank, Indian Overseas Bank and UCO Bank may open in red on Friday morning.