The Reserve Bank of India (RBI) on Wednesday said that it had removed UCO Bank from the Prompt Corrective Action (PCA) restrictions framework, subject to certain conditions and continuous monitoring. With this, UCO Bank will no longer face strict lending restrictions that were put in place by the RBI in May 2017. 

The central bank said that the performance of UCO Bank was reviewed by the Board for Financial Supervision, which found that the bank was not in breach of the PCA parameters. “The bank has provided a written commitment that it would comply with the norms of Minimum Regulatory Capital, Net NPA and Leverage Ratio on an ongoing basis,” the RBI said in a statement. 

UCO Bank has also apprised the RBI of the structural and systemic improvements put in place by the bank. This, according to the bank, will help it in continuing to meet these commitments. 

After the removal of UCO Bank, only two banks, Indian Overseas Bank and Central Bank of India, remain under the PCA framework. State-owned UCO Bank had posted over a four-fold jump in its net profit to Rs 101.81 crore for the first quarter ended June 30, as its bad loans fell significantly. 

The Kolkata-headquartered lender trimmed its gross non-performing assets (NPAs or bad loans) significantly to 9.37 per cent of the gross advances as of June 30, 2021 as against 14.38 per cent at June-end 2020. In value terms, gross NPAs fell to Rs 11,321.76 crore from Rs 16,576.43 crore.