Blaming wrong classification for showing assets as bad debt, United Bank of India today said the software sourced from Infosys has "i...
Please click one of the button below to read Full Story / Video.
Blaming wrong classification for showing assets as bad debt, United Bank of India today said the software sourced from Infosys has "inherent deficiencies" in identifying quality of assets.
The core banking solution (CBS) system of the bank is based on Infosys' Finacle software, United Bank of India (UBI) said in a filing to the Bombay Stock Exchange.
The Finacle system, the bank said, has inherent deficiencies to correctly identify non-performing assets (NPA) in certain categories" of borrowers like KCC (Kisan credit card), restructured account, overdraft account continuously overdrawn for more than 90 days, ECGC (Export Credit Guarantee Corporation) covered account, etc, adding that the deficiencies still continues in the software.
"The generation of NPA through system in September and December 2013 has given rise to a large number of standard accounts shown as NPA and NPA account shown as performing assets," United Bank said.
Reacting to it, an Infosys spokesperson said: "We wish to firmly state that the solution has the proven ability and framework required to address the asset classification and NPA reporting as per the norms prescribed by RBI."
United Bank further said that the weakness of the tools used by the bank previously and also in the tool used in September and December 2013 largely explain variation in NPA figures.
"We, therefore, clarify that wrong NPA classifications is a result of the deficiencies in the software used by the bank and the challenge of checking each asset classification manually particularly in small accounts rather than any intentional intervention at any level to hide NPA," it said.
Kolkata-based United Bank's gross non-performing assets rose 188.3 per cent to Rs. 8,546 crore during the three quarters of this fiscal. Following sharp rise in NPA, the RBI had ordered forensic audit to be done by an audit firm. The firm has submitted the report to the central bank.
The bank further said it has been "pursuing with Infosys for a long time to rectify these deficiencies in the Finacle system and the solution to some of which will be made available to the bank very shortly."
Infosys said that from time to time it provides enhancements in the features for banks to test and deploy in their environment to meet their business requirements.
Sponsored Links
Like us For more Updates
0 comments:
Post a Comment