UTI recovers Rs 1,000 crore in NPAs

Mumbai: The Unit Trust of India has recovered around Rs 1,000 crore of non-performing assets from its defaulters during the last four months.

The Trust has also mobilised another Rs 500 crore by participating in the government's disinvestment process and the buy-back programmes offered by various corporates in the last 11 months.

Senior UTI officials said that in an effort to trim UTI's non-performing assets, the institution has been calling up defaulter companies and persuading them to issue post-dated cheques for interest payments. If the cheques bounce for want of funds, UTI files criminal cases under Section 138 of the Negotiable Instruments Act. Around five per cent of the cheques received by UTI have already bounced and the mutual fund has filed cases against over 50 small and medium enterprises.

The officials said: "More significantly, in the case of the big corporates, the Trust will press for a change of management in case they are not ready to clear their dues."

UTI subscribes to the equity of companies, to quasi-equity instruments and to debt instruments. Often, companies do not pay the interest on the debt instruments.

UTI's net NPA level is pegged at 9 per cent. It had sticky debts of Rs 2,600 crore as on June 30, 2001.