Working to come out of PCA framework by Q2FY20: UBI chief

State-owned lender United Bank of India is working towards coming out of Prompt Corrective Action (PCA) farmework by second quarter of the current fiscal, its chief Ashok Kumar Pradhan said Tuesday.

After posting losses for seven consecutive quarters, UBI reported a net profit of Rs 95.18 crore in the last quarter of 2018-19.

"The bank's entire efforts is towards recovery and to come out of the Prompt Corrective Action by the second quarter of the current fiscal," Pradhan, the bank's Managing Director amd CEO, told reporters.

The bank's Gross Non-Performing Asset (GNPA) and Net NPA stood at 16.48 per cent and 8.67 per cent, respectively, at the end of the last fiscal.

"Our target is to bring down GNPA levels to 8-9 per cent and NNPA to 3-4 per cent, which will help us in getting out of the PCA, which has also led to restrictions in expansion of branches," Pradhan said.

The PCA framework kicks in when banks breach any of the three key regulatory trigger points -- namely capital to risk weighted assets ratio, net non-performing assets (NPA) and return on assets (RoA).

The PCA framework imposes lending restrictions and prevents banks from expanding, among other curbs.

On capital infusion, Pradhan said, "We want to come out with a QIP amounting to Rs 700 crore to Rs 800 crore, as well as are looking to raise around Rs 150 crore from Employees Stock Purchase Scheme (ESPS)."
Sounding caution, Pradhan said there were reasons for concerns about lending in the infrastructure sector. "Now NBFCs are likely to create some problem because of the cascading effect of IL&FS. We have to be very careful while lending to them."