Calcutta, Aug. 29 :    Calcutta, Aug. 29:  The Union finance ministry has raised questions on the capitalisation plans of the United Bank of India (UBI), even though the bank has said that it does not require any more funds at the moment. The ministry, which expressed concern on how the bank proposed to garner Rs 50 crore for its recapitalisation, has, however, not prescribed any harsh measures, like closure of more branches. Madhukar, UBI chairman and managing director said, 'We were lucky to have been able to present our case before the finance ministry. Though the ministry raised questions on our capitalisation, we have told finance secretary Ajit Kumar that at the moment, our problem is not an additional capital of Rs 50 crore. What we need now is increase our yield and pick up assets where little initial capital outlay is necessary.' The bank had increased its Tier-II capital by almost Rs 100 crore through private placement of bonds in the last financial year. This, the CMD said, has boosted its capital adequacy ratio to 10.5 per cent. UBI also plans to introduce an innovative loan product to tide over the poor credit offtake. 'We are planning to introduce a new loan product meant for entrepreneurs who procure raw materials from semi-urban and rural areas. This loan will carry an interest lower by 1 per cent from the prevailing market rates. On one side this will help our credit portfolio to grow and help the rural economy on the other,' the CMD said. The bank, whose non-performing assets (NPAs) hover around 10 per cent of the total advances, has adopted a new strategy to recover its bad debts. The strategy envisages delegation of more power to branch managers for taking instant decisions on the recovery of NPAs. Earlier, each recovery proposal was forwarded to the CMD before any decision was taken. 'This resolution has been passed at the last board meeting held on Saturday. And I hope this will enable us reduce the NPAs substantially,' Madhukar said. The bank has already informed the finance ministry that it intends to bring down the NPAs to a level of 5 per cent in the current fiscal. In the restructuring plan submitted to the finance ministry, the bank has said it wants to close down 55 of its unviable branches by March 2003. It has already closed down 23 of them. The bank is also trying to bring down the average cost of funds from 8 per cent to 7 per cent in the current year. Similarly, the average spread, now at 2.6 per cent, is expected to cross 3 per cent at the end of the current financial year.