UCO Bank again urges Reserve Bank of India to consider taking it out of PCA

The restructuring would be available to borrowers with exposure up to Rs 50 crore. In the last financial year, Uco Bank had restructured less than Rs 400 crore of retail and MSME loans.

State-run Uco Bank has again urged the Reserve Bank of India to consider taking it out of the the prompt corrective action (PCA) framework after posting full year profit for the last fiscal, its MD & CEO AK Goel said on Monday.

The RBI had initiated PCA for the Kolkata-based lender in May 2017 in view of high non-performing assets and negative return on assets. In the last financial year, the bank posted a full-year net profit of Rs 167.04 crore as against a whopping Rs 2,436.83 crore net loss during FY20. During FY19, net loss had stood at Rs 4,321 crore.

“We approached the RBI to consider taking the bank out of the PCA framework after declaring the fourth quarter results. The bank registered full-year profit. It has meet all the criteria for exiting PCA,” Goel said in a virtual press conference.

The lender had earlier approached the central bank on lifting the restrictions after it had posted a net profit during the last quarter of the financial year FY20. After making losses for several consecutive quarters, the bank had reported a net profit of Rs 16.78 crore for Q4FY20.

Last month, Uco Bank reported a nearly fivefold year-on-year jump in its net profit to Rs 80.03 crore for the fourth quarter last fiscal from Rs 16.78 crore for the same period of FY20. The lender showed a significant improvement in its asset quality during the fourth quarter as its NPAs in absolute terms fell 41% y-o-y at Rs 11,351.97 crore. Gross NPA ratio stood at 9.59%, while net NPA ratio was 3.94%.

On restructuring under the RBI’s new policy on loan recast, Goel said the bank already extended relief under Resolution Framework 2.0. to 2314 accounts, amounting `127 crore as on June 7. “We are expecting around Rs 1,000 crore of loans required to be invoked for restructuring by June itself. For the whole of the year the numbers may be more.” he added.

Banks and lending institutions can invoke restructuring under the proposed framework till September 30. The restructuring would be available to borrowers with exposure up to Rs 50 crore. In the last financial year, Uco Bank had restructured less than Rs 400 crore of retail and MSME loans.