UBI gains after RBI relaxes restrictions on credit disbursement to bank

United Bank of India rose 3.9% to Rs 28 at 10:35 IST on BSE after the Reserve Bank of India has relaxed the prompt corrective action restrictions imposed on the bank on sanction of advances, participation in restructuring proposals.

The announcement was made after market hours yesterday, 25 March 2015.

Meanwhile, the S&P BSE Sensex was down 205.88 points or 0.73% at 27,905.95.

On BSE, so far 1.02 lakh shares were traded in the counter as against average daily volume of 67,650 shares in the past one quarter.

The stock hit a high of Rs 29.35 and a low of Rs 27.75 so far during the day. The stock had hit a 52-week high of Rs 61.65 on 4 July 2014. The stock had hit a 52-week low of Rs 26.85 on 25 March 2015.

The stock had underperformed the market over the past one month till 25 March 2015, falling 26.87% compared with the Sensex's 3.09% fall. The scrip had also underperformed the market in past one quarter, dropping 30.36% as against Sensex's 3.32% rise.

The mid-cap PSU bank has equity capital of Rs 716.66 crore. Face value per share is Rs 10.

United Bank of India said that the Reserve Bank of India vide their letter dated 25 March 2015 has inter alia, relaxed the prompt corrective action restrictions imposed on the bank on sanction of advances, participation in restructuring proposals etc. subject to inter alia bank's capital to risk (weighted) assets ratio (CRAR) not falling below 9.5% and credit to deposit (CD) ratio not exceeding 70%.

United Bank of India reported net profit of Rs 41.78 crore in Q3 December 2014 compared with net loss of Rs 1238.08 crore in Q3 December 2013. Total income fell 1.7% to Rs 2934.66crore in Q3 December 2014 over Q3 December 2013.

The government of India holds 78.92% stake in the bank as at 31 December 2014.

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