Financials

RBI initiates prompt corrective action against UCO Bank for soaring NPA

RBI initiates prompt corrective action against UCO Bank for soaring NPA

Kolkata: State-run UCO Bank on Friday said Reserve Bank of India (RBI) initiated prompt corrective action for the bank in view of its high net non-performing assets (net NPA) and negative return on assets (RoA).

“RBI, vide their letter dated May 5, has initiated prompt corrective action for UCO Bank in view of high NPA and negative RoA. These measures aim at improving performance of the bank and to strengthen internal controls of the bank,” it said in a regulatory filing.

However, the lender said these measures will not adversely impact performance of the bank and the board of directors at its meeting held on Friday took note of the measures taken by the central bank.

Earlier this month IDBI Bank had said the apex bank initiated PCA against it.

Under prompt corrective actions, controls imposed on a bank could range from restrictions in branch expansions to curb on relatively risky lending.

The Kolkata-based bank’s asset quality deteriorated further in the March quarter of 2016-17 as its gross non-performing assets in absolute term rose close to 8 per cent to Rs 22,540.95 crore from Rs 20,907.73 crore for the corresponding quarter previous fiscal.

It reported that its gross NPAs soared by 1.6 per cent from Rs. 22,181.26 crore in the December quarter.

The bank reported that its net loss narrowed by close to 65.71 per cent to Rs 588.19 crore for the quarter ended March 31, from Rs 1,715.15 crore for the same period a year ago, on the back of lower provisions to cover bad loans.

–IANS