Industries that went for expansion in last 4 yrs have been caught in a trough: Union Bank CMDhttps://indianexpress.com/article/business/banking-and-finance/industries-that-went-for-expansion-in-last-4-yrs-have-been-caught-in-a-trough-union-bank-cmd/

Industries that went for expansion in last 4 yrs have been caught in a trough: Union Bank CMD

"Did we know four years ago that the economy will not do well? Please do not forget that banking is a reflection of the economy," said Arun Tiwari.

Stating that the health of the banking sector is the “reflection of the economy”, Arun Tiwari, Chairman and Managing Director of Union Bank of India, on Saturday said that a number of industries that went for expansion in the last four years have been “caught in the trough” as they are now facing problems of “cash-flows.”.

“Did we know four years ago that the economy will not do well? Please do not forget that banking is a reflection of the economy. If the economy is not doing well then the banking also cannot do well….We did not know this four years ago, and today we are faced with NPAs,” said Tiwari while talking to mediapersons on the sidelines of the second convocation ceremony of Gujarat Forensic Sciences University where he gave away gold medals for best scholastic performance.

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Talking about the Non-Performing Assets within the Union Bank of India, the official said 58-60 per cent of the NPAs are in the core sector of steel, power, road and cement. “If the economy is growing at 7.5 percent, then the core sector has to be fixed. It is not that there is a problem with the industry. The issue is of cash-flow. A lot of industries went for expansion in the last four years. Then the recession came and they have been caught in the trough.”

The CMD also felt that the proposed Bankruptcy Bill that is expected to be introduced in the Parliament by the NDA government will speed up the recovery process. “Once the person feels that he cannot shake off the recovery process, then he comes to the table for talks,” Tiwari said when asked how banks proposed to make recovery easier in wake of the controversy surrounding liquor baron Vijay Mallya.