RBI says that UCO Bank is not in violation of PCA norms as per its results for the year ended March 31, 2021.
New Delhi: There is news of big relief for UCO Bank. After four years, the restrictions imposed on the bank for lending are now over. The Reserve Bank of India had imposed sanctions on UCO Bank on lending in May 2017. Giving this information, RBI has said that UCO Bank has been taken out of the restrictions of Prompt Corrective Action (PCA).
UCO Bank RBI Review
On this, the RBI says that the performance of UCO Bank, currently under the PCA framework of the Reserve Bank, has been reviewed by the Board of Financial Supervision. In which it was seen that the bank is not in violation of PCA norms as per its results for the year ended 31 March 2021. The net NPA ratio of UCO Bank as on March 31 was 3.94%, which is 151 basis points lower than the corresponding period last year. Its total capital adequacy ratio under Basel III was 13.74%, up 204 bps from the fourth quarter of FY20.
Prompt Corrective Action Framework – UCO bankhttps://t.co/lTZBehLdN2
— ReserveBankOfIndia (@RBI) September 8, 2021
We are getting banks out of sanctions: Das
RBI Governor Shaktikanta Das said on 6 August that he is taking banks out of the restrictive framework on the basis of assessment. He said that we keep reviewing that situation. Recently, we have delisted a public sector bank from the PCA tag, and we analyze it as and when required requests are received, if it meets the regulatory requirements of RBI and if in our assessment, we If it seems that this is a right case, then RBI will take necessary steps. That’s why we are taking banks out of PCA.
But this bank is still in PCA
UCO Bank may have been taken out of the PCA framework, but two banks Indian Overseas Bank (IOB) and Central Bank of India are still under the restrictions of the PCA. The Reserve Bank uses the PCA framework to rein in banks that have violated certain regulatory norms on bad loans and capital adequacy. PCA curbs high-risk loans, segregates excess capital on provisioning and imposes restrictions on management salaries.
