Public sector lender, United Bank of India is on negotiation terms with many asset reconstruction companies (ARCs) to sell a portion of its bad loans so as to clean up its loan book, said a top official of the bank.

"We have received bids from ARCs to sell our bad assets. We are presently evaluating these bids and expect to sell Rs 100 crore worth bad loans by the end of this month," Bhasin said.

The bank has taken up this decision as part of its advance restructuring portfolio and also to reduce the NPA size of its book of accounts, Bhasin said.

The current gross NPA size of the bank is at 2.4 % while its actual NPA stand s at 1.21%. This figure is a bit higher than the other contemporary banks.

UBI has a loan book of Rs. 43,000 crore while its total deposit-base stands at around Rs 67,000 crore.

UBI recently listed its shares in Bombay Stock Exchange at a 17 per cent premium of Rs 77 as against an issue price of Rs 66 per share. On NSE, the shares were listed at Rs 74.9, at a premium of 13.48 per cent.

After UBI, only Punjab and Sind Bank remains amongst the unlisted public sector entities.

The NPA level of banks had started rising following the financial crisis in the economy which led to increased level of unemployment.

In order to bring a decline in NPA levels, the RBI has also declared that banks need to maintain more disclosure regarding NPAs.

However, credit rating agency, CRISIL has said that the level of NPAs is likely to come down in the upcoming months as economy is on a revival path and firms would thus be in a better position to repay their loans.