According to UTI sources, the Trust is currently identifying the sticky exposures in several companies and will make efforts to get out of these exposures over the next two years. The 4.8 per cent NPA level of the scheme translates into a whopping Rs 1,056 crore. The current corpus of the scheme is Rs 22,000 crore with 2.20 crore investors.

The Trust will continue to stay away from granting term loans, a practice which it has consciously preferred to refrain from for the past two years. "We have identified some companies from the steel sector and are in the process of shortlisting more such firms. We have already made the provisioning for our NPAs but are keen to bring down the figure to 2 per cent. This should be achieved in a maximum of two years," said atop UTI official.

UTI, which is reeling under the impact of a major erosion in its asset values, is keen to get its sticky portfolio out of the way. Earlier, UTI used to do a lot of term lending through US-64 and a large amount of its NPA is lying here as several companies have failed to realise adequate levels of growth.

UTI's move to look at the matter seriously comes even as the level of NPAs in the books of most financial institutions has become a matter of concern for the financial community. All banks and financial institutions are immersed up to their brink in bad or sticky loans with the problem looming large over the sector. US-64 had recorded a negative balance of Rs 1,098.49 crore in the reserves account as on June 30, 1998, which came down to Rs 150 crore on September 29. The negative balance was due to a depreciation in its assets to the tune of Rs 3,566 crore which was taken on record after the finalisation of the accounts on September 25.

The depreciation in the scheme was primarily dueto bad market conditions and a free fall in share prices. The trustees of UTI decided to adjust the surplus that was generated in the scheme with the amount of depreciation and after the adjustment the amount of Rs 1,098.49 crore was shown as negative balance in the accounts of US-64.