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UCO Bank turnaround plan takes shape, sans salary cut

Bank to prune costs via branch rationalisation, CASA growth instead

Namrata Acharya  |  Kolkata 

UCO Bank turnaround plan takes shape, sans salary cut

With salary cuts not being a part of the turnaround plan, Kolkata-based has embarked upon a cost-cutting plan that involves reduction of operational cost through branch rationalisation and growth, among other measures.

Earlier, the Centre had sent letters to 10 banks, including UCO Bank, asking them to lay out a revival road-map for availing government funds. The letter also said that some staff benefits could be restructured on a temporary basis. However, on account of stiff opposition from unions, the clause of salary cut was not included in UCO Bank's

Instead, the present includes merger of unviable branches, focus on mobilisation, restrictions in giving loans to corporate entities, and depending on sectors like agriculture, retail and micro small and medium enterprises for loan growth. This year the bank is looking at a marginal 5 per cent growth in credit offtake, said R K Takkar, MD and CEO,

Operational expenses at UCO Bank
Q1 of Year Expenses (Rs cr)
2017-18 703
2016-17 714
2015-16 649
2014-15 603
Source: website

So far, the bank has merged about 14 branches, and another 15-20 branches would be merged this financial years, said Takkar.

Notably, UCO bank's cost of operation increased by about 17 per cent in the last three years. In the Q1 of FY2014-15, the bank's operating expense was around Rs 603 crore, which stood at around Rs 703 crore in Q1 of FY2017-18.

had posted a net loss of Rs 663 crore in the first quarter of the present financial year, against a net loss of Rs 441 crore in the first quarter of the preceding financial year. One of the reasons behind the losses being high provisions, which stood at around Rs 1,272 crore in the last quarter.

"As far as is concerned, salary cut was not a part of it. Also, salary cut does not serve any purpose, and instead the employees need to be motivated to work towards financial well-being of the bank,"' according to Takkar.

Recently, one of the zonal head of the bank had requested to suspend salaries to employees in 11 branches to punish employees for non-performance. The unions were quick to react, and the proposal was shot down eventually by the top management of the bank.

"Salary as part of operating expenses of banks would be close to 20 per cent. In the signed with the unions, there is no clause of salary cut. However, we are watching the situation, and we do not see the proposal to stall salaries of some employees as an isolated case. We have raised strong protest at UCO Bank, after the idea was mooted,"' said aid Rajen Nagar, president,

As on 31st March, 2017, had an employee strength of around 24620, and the bank had recruited about 735 officers last financial year.

First Published: Tue, September 05 2017. 17:45 IST
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