The Reserve Bank of India on Wednesday removed UCO Bank from its Prompt Corrective Action Framework (PCAF) subject to certain conditions and continuous monitoring.
The Kolkata-based bank came out of the PCA restrictions after more than four years. The RBI had initiated prompt corrective action in May 2017 in view of high non-performing assets and negative return on assets.
In a release on Wednesday, the RBI said, “The performance of UCO Bank, currently under the Prompt Corrective Action Framework (PCAF) of the
RBI, was reviewed by the Board for Financial Supervision. It was noted that as per its published results for the year ended March 31, 2021, the bank is not in the breach of the PCA parameters.”
The RBI said the lender has provided a written commitment that it would comply with the norms of minimum regulatory capital, net NPA and leverage ratio on an ongoing basis, and has apprised the regulator of the structural and systemic improvements that it has put in place. These steps will help the bank continue to meet its commitments.
“Taking all the above into consideration, it has been decided that UCO Bank is taken out of the PCA restrictions subject to certain conditions and continuous monitoring,” the central bank said in the release.
UCO Bank had urged the RBI to consider taking it out of the PCA framework after posting full-year profit for the last fiscal. The bank had reported a net profit in 2020-21 after continuous losses in the previous five financial years. Net profit during the year ended March 2021 was Rs 167.03 crore.
The asset quality improved significantly during the last fiscal. Gross NPA fell to Rs 11,351.97 crore from Rs 19,281.95 crore as on March 31,
2020. Its gross NPA ratio dropped to 9.59% at the end of FY21 from 16.77% at the end of FY20, while net NPA ratio reduced to 3.94% from 5.45%.