The Federal Reserve Bank of India (RBI) today lifted UCO Bank out of the prompt corrective action (PCA) list after a spot of 4 years. The banking regulator found that the state-run lender wasn’t in breach of its rules on regulatory capital, bad loans, and leverage ratio, in step with an announcement released by the RBI on Wednesday, September 8.
In 2017, UCO Bank was placed under PCA framework restrictions because of its poor financial health, when several other lenders within the country battled unsecured assets. Further, the RBI had to tighten thresholds and under the PCA, it imposed business restrictions on banks with weak financial parameters.
Prompt corrective action is triggered if any bank’s net non-performing loans ratio crosses A level of six per cent or if the capital requirements to be maintained are breached, under RBI norms.
The financial organisation, in its circular, added that UCO bank has committed to complying with its norms of minimum regulatory capital, net NPA (non-performing assets) or bad loans, and leverage ratio on an ongoing basis.
UCO bank has also apprised the RBI of the systemic and structural improvements that it’s put in situ which might help the bank to satisfy the commitments.
The Kolkata-headquartered lender had requested the RBI to lift the PCA framework restrictions after it had posted profits for 3 quarters within the yr 2020-21. UCO Bank’s gross NPA reduced to 9,37 per cent of gross advances within the April-Juen quarter of this fiscal, compared to 14.38 per cent within the year-ago period.
On Wednesday, shares of UCO Bank settled 0.16 per cent higher at ₹ 12.81 apiece on the BSE. UCO Bank opened on the BSE at ₹ 12.85, touching an intra day high of ₹ 12.96 and an intra day low of ₹ 12.79, throughout the trading session today.
