UCO Bank share price spurts 16% intraday as RBI lifts state-owned bank from PCA restrictions

A day after the Reserve Bank of India lifted UCO Bank from PCA (Prompt Corrective Action) norms, the shares of this PSU (public sector unit) bank has spurted almost 16 per cent to Rs 14.85 per share on the BSE intraday trade during Thursday’s session.

The central bank on Wednesday (September 8, 2021,) informed about removing UCO Bank from PCA through an official announcement.  The RBI said, “The performance of UCO Bank was reviewed by Board for Financial Supervision and it was noted that as per its published results for the year ended March 31, 2021, the bank is not in the breach of the PCA parameters.”

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UCO 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 central bank further said.

Moreover, the state-owned bank has also apprised the central bank of structural and systematic improvements it has put in place to help the bank in continuing to meet the requirements.

Taking all the above into consideration, it has been decided that UCO Bank is taken out of the PCA restrictions subject to certain conditions and continuous monitoring, the RBI also said in its release.

Since May 2017, UCO Bank had been under PCA and barred from increasing risk-weighted assets due to high NPA ratios and negative returns on assets. Under PCA, the central bank imposes business restrictions on banks with weak financial parameters. 

The stock at around 11:18 am has been trading over 11 per cent higher to Rs 14.22 per share on the BSE as compared to flat S&P BSE Sense on Thursday. The stock in the last five sessions had been trading below Rs 13 per share levels, however, it is trading over Rs 14 per share mark today.