We're working hard to preserve our identity: A K Goel, MD & CEO, UCO Bank

In a Q&A, the chief of the PSU lender, currently under PCA, dwells on its rigid and target-driven recovery and CASA deposit mobilisation plans

For public sector lender UCO Bank, currently under prompt corrective action (PCA), turnaround is still few quarters away, as the bank expects to come out of PCA and posts profits only by the end of this financial year. However, the bank has firmed up rigid and target-driven recovery and CASA (current and savings account) deposit mobilisation plans, says A K Goel, M D and CEO of UCO Bank in an interview with Namrata Acharya. Edited Excerpts:

What is your short- and long-term vision for UCO Bank?

As far as short-term vision in concerned, the bank should come of PCA and also come back to profitability  by Q4 of FY20. The medium goal is to be the best of the East. The long-term vision--by 2043, when we will be celebrating our centenary year --is to become the best bank in the country.

In which areas do you want to be the best bank?

First, we must be customer-centric. The second parameter is growth in business, both liabilities and assets. In the short-term, we want to increase the share of CASA (Current Account and Savings Account) deposits. In savings accounts, our growth has been about 8.30 per cent in the past one year. We want to grow this further to 15-17 per cent. This year, we will focus on both current and savings account.  

UCO Bank was so far getting substantial interest-free deposits for settling payments for oil imports from Iran. Now that that window might be shut, what is the plan to replace the deposits?

Iran deposits were adding to our current account deposits. That were substantial deposits. We will have to replace this amount with current account deposits. We have given targets to each branch to open at least five current accounts a month, and increase current account deposits by Rs 2 crore in a year. We have more than 3,000 branches, so we will have Rs 6,000 crore coming immediately. In metro and urban areas, where we have corporate clients, we will give higher targets.

What is your roadmap to come out of prompt corrective action?

On two major parameters, CAR and NPA, we are close to the target. Our capital adequacy is 10.70 per cent, against a requirement of 10.84 per cent. Our net NPA current is 9.72 per cent. To bring this to six per cent, we have given targets to all zones to recover Rs 2,000 crore each quarter at any cost. This does not include recovery from NCLT accounts. In the first and second list, we have Rs 6,000 crore exposure, and are hoping to get at least Rs 1,500 crore in the first or second quarter.

What are the other recovery measures you are taking?

Recovery is our key focus areas. For all loan accounts less than Rs 25 lakh, and on which we have an exposure of about Rs 5,000 crore, we have told branches that each and every borrower has to be visited. So even if at least 50 per cent is recovered, that will be a substantial amount.

We made recoveries of Rs 1,261 crore in the last quarter. Of this, around Rs 600 crore was recovered in the last fortnight of March. Further, top 100 NPA account will be monitored by the MD & CEO and EDs personally. We have also taken list of 20 NPA accounts where recovery is possible from each zones for daily monitoring.

What are your plans to reduce operational costs?

We have rationalised 15 branches till last year. We have 100-plus loss making branches whose efficiency we are trying to improve. We will try to rationalise if they don’t improve. It is very difficult to close branches in rural and unbanked areas, so we will see which urban and semi-urban branches we can shut down.

Do you see credit demand picking up ?

First of all, we are very cautious with corporate loans. We are not extending loans to even PSUs with anything less than a triple-A or double-A rating. Our focus is on retail, MSME, agriculture sectors.

What is your view on the consolidation in the banking sector?

Organic growth is good, but consolidation should be done keeping mind IT, geography and culture. If all this matches, it is good. However, UCO Bank does not want to lose its identity; we are working hard towards it.

How do you plan to reduce government stake in the bank?

We need to reduce government stake to 75 per cent by August 2020. We have various options, including QIP, ESPS (Employee Stock Purchase Scheme), among others.  

What is your opinion on success of IBC? 

NCLT has changed the mind of the borrower. Earlier promoters used to think that their companies would never go out of their hands. Now the default rate is also less.

 Are you taking fresh exposures in the NBFC sector?

We have taken a decision (that) in whichever NBFC, there is group support, we will lend. For standalone NBFCs, there is an issue.