UCO Bank out of PCA watchlist: RBI

On Wednesday, the Reserve Bank removed UCO Bank from its Timely Corrective Action Framework (PCAF) due to improvements in various parameters and a written commitment that state lenders will comply with minimum capital regulations.
The Reserve Bank of India stated in a statement that in reviewing UCO Bank’s performance, the Financial Regulation Commission found that the bank did not violate PCA parameters based on the financial results published for 2021.
The The bank also provided a written commitment indicating that it will continue to meet the regulatory minimum capital, net delinquency and leverage ratio.
The lender also notified the RBI of the structural and systemic improvements it has implemented, which will help the bank continue to meet its financial commitments.
“Considering all the above factors, it has been decided that under certain conditions and continuous monitoring, UCO Bank will be free from PCA restrictions,” said the Reserve Bank of India.
The lender in Kolkata has been subject to the PCA since May 2017.
PCA is triggered when a bank fails to meet certain regulatory requirements, such as return on assets, minimum principal and arrears of assets.
Restrictions prevented banks from lending freely in various ways and forced them to operate in restrictive environments, which turned out to be an obstacle to growth.
UCO Bank’s net profit in the first quarter of the fiscal year ended June 30 increased fourfold to 101.81 crore, due to a sharp decline in non-performing loans.
As of June 30, 2021, lenders have significantly reduced their total non-performing assets (NPA or bad debts) to 9.37% of total advance payments, down from 14.38% at the end of June 2020. 4,444 net NPA decreased by 3.85% (43.8725 crore) from 4.95% (51.3818 crore).
UCO Bank shares closed at Rs 12.81 per share on the BSE, with little change on Tuesday. The announcement of the Reserve Bank of India was issued after market trading hours.
Indian Overseas Bank (IOB) and the Central Bank of India are still affiliated with ACC.