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UCO Bank share jumps 6% after lender seeks removal of PCA tag

UCO Bank stock gained up to 6.03% to Rs 14.41 against previous close of Rs 13.59 on BSE

twitter-logoBusinessToday.In | June 9, 2021 | Updated 00:14 IST
UCO Bank share jumps 6% after lender requests RBI to remove PCA tag
UCO Bank share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

eks Share of UCO Bank rose over 6% today after the state-owned lender it had written to RBI requesting to withdraw it from Prompt Corrective Action (PCA) framework.  UCO Bank stock gained up to 6.03% to Rs 14.41 against previous close of Rs 13.59 on BSE.

Market cap of the firm rose to Rs 13,914 crore.

Total 18.91 crore shares changed hands amounting to turnover of Rs 2.67 crore. The share hit 52-week high of Rs 16.76 on June 26, 2020 and 52 week low of Rs 10.61 on April 19, 2021.

The stock has risen 4.47% in the last 3 days. UCO Bank share is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.  The stock has gained 6.39% in one year and risen 10.33% since the beginning of this year.

In a month, the share has gained 24%.

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On Monday, UCO bank managing director and CEO AK Goel said the lender was hopeful of coming out of the Prompt Corrective Action (PCA) framework very soon.

Goel said the bank had already written to RBI requesting it to withdraw PCA after the capital infusion.

"I dont foresee any hurdle and remain hopeful that we will get the regulators approval to come out of PCA," UCO bank managing director and CEO A K Goel said when asked about the issue of the latest capital infusion through zero-coupon bonds.

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In the last round, the government had infused Rs 14,500 crore of equity into Central Bank of India, Indian Overseas Bank, Bank of India, and UCO Bank by issuing non-interest- bearing, non-transferable bonds to these state-owned lenders.

UCO Bank had received Rs 2,600 crore and post that capital adequacy ratio of the bank rose to 13.74 per cent against a requirement of 10.8 per cent of which tier-I had risen to 11.14 per cent up from the mandatory requirement of 8.8 per cent.

"We have allotted it to the government with prior approval of the RBI," Goel said.

PCA is triggered when banks breach certain regulatory requirements such as return on asset, minimum capital, and quantum of the non-performing asset. PCA restrictions disable the bank in several ways to lend freely and force it to operate under a restrictive environment that turns out to be a hurdle to growth.

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