UCO Bank spurts as RBI removes PCA restrictions

UCO Bank jumped 13.97% to Rs 14.60 after the Reserve Bank of India on Wednesday announced that it has removed the state-owned lender from prompt corrective action (PCA) restrictions.

The Reserve Bank of India in a press release on Wednesday said, The performance of the UCO Bank, currently under the Prompt Corrective Action Framework (PCAF) was reviewed by the board for financial supervision. It was noted that as per its published results for the year ended 31 March 2021 the bank is not in the breach of the PCA parameters.

The bank 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 apprised the RBI of the structural and systemic improvements that it has put in place which would help the bank in continuing to meet these commitments. UCO Bank was in PCA framework since May 2017.

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, RBI further added.

The central bank uses PCA framework to check banks that have breached certain regulatory thresholds in bad loans and capital adequacy ratio. PCA inserts curbs on high-risk lending, setting aside more money on provisions and restrictions on management salary.

UCO Bank is a commercial bank. Its segments include treasury, corporate/wholesale banking, retail banking and other banking operations. It offers personal banking, corporate banking, international banking and rural banking services

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