UCO Bank is on track to come out of RBI's Prompt Corrective Action (PCA) framework in the current fiscal, a top offical of the lender has said.
The bank is hopeful of bringing down the net NPA below 6 per cent in 2019-20 from 7.34 per cent as on Sepetmber 2019, Managing Director and CEO A K Goel said.
The framework is used to put lenders with high non- performing assets, weak return on assets and low capital adequacy ratio on a short leash.
Fund infusion by the government will also help maintain capital adequacy required under the corrective measure, he said.
With recoveries on track, net NPA in the December quarter is likely to be under 7 per cent, he said. In the third quarter, the lender recovered Rs 800-900 crore from four large accounts.
UCO Bank is also planning to rebalance its incremental loan book, raising the retail loan portfolio to 50 per cent of its total domestic advances from 45 per cent.
"Now, it is 55:45 (corporate:retail and small ticket loans). Rebalancing it to 40:60 will not be possible, so we are aiming for 50-50," Goel said.
He said liquidity is now sufficient in the system, but "pessimism" is holding back credit growth.
Goel also said the bank will rollout a new loan management system involving artificial intelligence (AI) in collaboration with fintech companies.
The system will be introduced by March, bank officials said.
The lender reported an operating profit of Rs 2,760 crore in FY19 as against Rs 1,334 crore in the previous fiscal, reflecting a growth of 106.88 per cent.
The net loss in FY19 stood at Rs 4,321 crore as compared to a loss of Rs 4,436 crore in FY18.