UCO Bank share price jumped over 5 percent in the morning session on June 8 after the bank requested the Reserve Bank of India (RBI) to take it out of the prompt corrective action (PCA) framework following an improvement in its financial parameters.
The Kolkata-based lender has requested the Reserve Bank of India (RBI) to take it out of the prompt corrective action (PCA) framework following an improvement in its financial parameters. The bank has written to the banking regulator, Ajay Vyas, Executive Director, UCO Bank told Moneycontrol in an exclusive interaction.
The bank has been planning to make the request with the regulator for the removal of the PCA tag after it posted three successive quarters of profit in FY21, according to statements made earlier by AK Goel, MD & CEO, UCO Bank. In Q4 of FY21, too, UCO Bank posted a profit of Rs 80 crore. On a full-year basis, its net profit stood at Rs 167 crore.
Under PCA, the RBI imposes certain business restrictions on banks with weak financial metrics. The nature and degree of curbs are threshold-based and depend on the financial profile of each individual bank. UCO Bank has been under PCA since May 2017 and as such, it has been barred from increasing risk-weighted assets due to its high non-performing asset (NPA) ratios and negative return on assets.
UCO Bank’s capital adequacy ratio (CAR) stood at 13.74 percent, against the regulatory minimum of 11.5 percent. Its net NPA ratio was at 3.94 percent against a required 6 percent, and its return on assets (RoA) stood at 0.12 percent on an annualised basis.
The stock was trading at Rs 14.34, up Rs 0.75, or 5.52 percent at 09:34 hours. It has touched an intraday high of Rs 14.41 and an intraday low of Rs 14.05.