18.10.2013

The Branch Head,Thoothukudi Main Branch.

Sub: Quickening Recovery of Interest unrealized on NPA Accounts –An effective tool for increasing profitability of branches.--------------------------------------------------------------------------------------------------------------------

Mounting up of Interest Unrealized on NPA Accounts

On review, we observe that there is substantial amount under the head “Interest Unrealized on NPA accounts” to be recovered from NPA Borrowers of your branches as detailed below as on 17.10.2013.

(`. In Cr)

NPA Position as on 30.09.2013Interest Unrealized on NPA Accounts as on 17.10.2013

Total Amount locked up as NPA

No of Accounts Gross NPA

109 0.64 1.57 2.21

It is to be noted that the above position does not include HO- Transferred NPA Accounts of your Branch.

It is needless to state that whatever recovery made in a NPA Account will be first adjusted towards the outstanding in the Interest unrealized on the particular NPA Account and the amount so reversed will be directly credited to Interest Income. It means that recovery of interest unrealized on NPA Accounts will result in increasing the branch profitability.

NPA Recovery – Need of the Hour

Quantum of amount lying under the head “Interest unrealized on NPA accounts” is large for September 2013. If all our branches together collectively contribute for recovery of those interest arrears of NPA Accounts, it would certainly lead to increase bank profitability to a greater extent. Hence the branch is urged to give top-priority for bringing down the outstanding in the Interest Unrealized on NPA Accounts to bare minimum level possible by gearing up branch recovery team. Take war-foot measures to recover all NPA Accounts including (HO –Transferred NPA Accounts).

Using Appropriate Recovery Measures depending up on each case history of NPA Accounts

One size fit all approach does not suit for NPA recovery. Depending up on each case, appropriate recovery strategy need to be followed. For those borrowers who do not come forward to repay the dues in spite of having sources for repayment, the branch has to accelerate the recovery process through SARFAESI Act. In case of deserving cases, Branch shall expedite recovery through OTS provided the borrower’s OTS request is viable as per our bank norms.

Considering the importance of improving profitability of branch, you are advised to pay immediate attention for bringing down the outstanding in Interest Unrealized on NPA Accounts to lowest level possible.

Best Wishes!

S..Selvan Rajadurai,General Manager,Business Development.