UCO Bank was placed under the PCA framework in 2017 due to poor financial health of the bank.Shares of the Kolkata-based UCO Bank rose as much as 16 per cent to hit an intraday high of Rs 14.85 after the Reserve Bank of India removed the bank from its prompt corrective action (PCA) list after a gap of four years.
RBI found that the state-run lender was not in breach of its rules on regulatory capital, bad loans, and leverage ratio, according to a statement released by the RBI on Wednesday.UCO Bank was placed under the PCA framework in 2017 due to poor financial health of the bank.
UCO Bank had a very high ratio of bad loans.
In 2017 UCO Bank's net non-performing assets as a percentage of total advances stood at 8.94 per cent.
Under RBI rules, prompt corrective action is triggered if a bank's net NPL ratio crosses 6 per cent.The central bank, in its circular, added that UCO Bank has committed to complying with its norms of minimum regulatory capital, net NPA (non-performing assets) or bad loans, and leverage ratio on an ongoing basis.UCO Bank has also apprised the RBI of the systemic and structural improvements that it has put in place which would help the bank to meet the commitments.As of 11:53 am, UCO Bank shares traded 11 per cent higher at Rs 14.19, outperforming the Sensex which was trading on a flat note.