Thursday, May 13

UCO Bank plans to disburse Rs 4000 crore in next 45 days

KOLKATA: Sitting on a cash pile and after recovering Rs 800-900 crore from four stressed accounts, state-owned UCO Bank has announced a “loan carnival” that will seek to disburse Rs 4,000 crore of retail and enterprise loans in the next 45 days.

“We are sitting on huge liquidity. The loan carnival will help us use this fund effectively,” Uco Managing Director AK Goel said.

The bank has set a target of Rs 2700 crore retail loan disbursement under the overall plan and is focusing on home loans, car loans and gold loans to achieve this. The balance Rs 1,300 crore will be lent to micro, small and medium enterprises (MSMEs).

“This exercise will also help us re-balance our portfolio,” executive director Ajay Vyas said.

At present, 55% of the bank’s outstanding advances of around Rs 1.17 lakh crore are wholesale lending, which is expected to come down to 50% after March.

Goel said the bank is committed to bring down its net non-performing ratio to less than 6% by March, from 7.32% at the end of September last year, to exit the Reserve Bank of India’s prompt corrective action (PCA) framework.

The lender was put under on PCA in 2017 for its high bad loan ratios and negative return on assets.

The bank also said it has made cash recovery from four accounts—Ruchi Soya, Essar Steel, RattanIndia Power and Prayagraj Power—in the quarter to December by way of corporate debt resolution under the bankruptcy law.

This may help the bank reduce net losses in the third quarter while it expects to be back in black in the fourth quarter.

UCO Bank had reported net losses for the last 16 quarters. Its gross NPA ratio was 21.87% at the end of September last year even after improvement from 25.37% a year back. Net NPA ratio improved to 7.32% from 11.97% in the same period.

The government has injected Rs 4,272crore in the bank in 2019-20, including Rs 2,142 crore infused in the last week of December.

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