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Informist, Monday, Jul. 21, 2025

NEW DELHI – After a significant delay, Kolkata-based lender UCO Bank plans to "go live" with the Reserve Bank of India's retail central bank digital currency pilot during the ongoing September quarter, Managing Director and Chief Executive Officer Ashwani Kumar said Monday. It is to be noted that UCO Bank had last year said, after being far behind the original timeline, it may join the retail central bank digital currency pilot by August 2024.

This is part of the RBI's retail digital rupee pilot project that started on Nov. 31, 2022, initially covering Mumbai, New Delhi, Bengaluru and Bhubaneswar in closed user groups, comprising customers as well as merchants. Eight banks were identified for phase-wise participation. "All necessary infrastructure, approvals everything is in place. Application is already available on Playstore," Kumar said in a post-earnings press conference. 

The public sector bank's bottom line for Apr-Jun rose 10.3% on year to INR 6.07 billion. However, the net profit fell 7% on quarter. On Monday, shares of the bank closed nearly flat from Friday's close at INR 31.74 on the National Stock Exchange. 

Financial results detailed earlier in the day showed that UCO Bank's net profit for the quarter ended June rose on year due to an increase in other income, mainly treasury income. Kumar said that treasury gains were robust in Apr-Jun following the central bank's front-loaded rate cut as a result of which yields came down creating an opportunity to book some profits. This quarter, however, yields are slightly stable but the trading opportunities are coming whenever there is an upward or downward movement, he added. 

"But we expect some amount of trading gains to come this quarter also. Maybe, it will be range-bound and may not be the same (as Apr-Jun)," Kumar said. Like many other banks, especially public sector banks, treasury income aided UCO Bank in the June quarter with income under this head rising 19.5% on year to INR 4.85 billion. 

The bank's business performance was steady, with global advances and global deposits rising nearly 16% on year and 11% on year, respectively, to INR 2.25 trillion and INR 2.99 trillion as of Jun. 30. Retail advances were up nearly 31% on year at INR 561.95 billion at the end of June while corporate book grew 15% on year to INR 740.51 billion. Kumar said that corporate loan book will likely grow 12-14% in the current financial year. Retail loan book is also expected to maintain the current momentum, he added.

Financial results released earlier also showed that a sharp rise in the lender's provision ate into its bottom line. The bank's provisions and contingencies rose 34.3% on year to INR 6.16 billion in the June quarter. The provisions on non-performing assets rose to INR 4.63 billion from INR 3.97 billion reported a year ago. The bank's chief said that retail slippages are expected to be range bound in coming quarters. 

Speaking about recoveries, Kumar said that he is in discussion with government and other lenders to recover state-owned Mahanagar Telephone Nigam Ltd's default. Last week, MTNL said that it had defaulted on repayment of loans and interest on an outstanding of INR 85.9 billion to seven banks between August 2024 and February 2025. Such defaults have been classified as non-performing assets by the banks.

In a regulatory filing with bourses, the company stated that defaults occurred in payments to Union Bank of India, Bank of India, Punjab National Bank, State Bank of India, UCO Bank, Punjab and Sind Bank, and Indian Overseas Bank. Presently, there is no resolution plan yet to recover the default amount, he said. 

Kumar also updated that UCO Bank was proactively working on mitigating mule accounts. Mule accounts are typically used to launder the proceeds of crime, with fraudsters recruiting unsuspecting individuals to act as "mules" by using their bank accounts to receive or transfer illicit funds. These accounts, which often operate under false identities or third-party names, are commonly linked to money laundering, tax evasion, and other financial crimes.  

On its fundraising plans, Kumar said that the bank does not plan to raise any capital in Jul-Sept out of the approved plan to raise equity capital amounting to INR 27 billion in 2025-26 (Apr-Mar) through various modes like qualified institutional placement or follow-on public offer route. "..the quantum and timing is yet to be decided. We will be going to the government also for their approval. But at present, in this quarter, there are no plans. Maybe in the next quarter, we can take comments," he said. 

In April, the lender's board had given permission to raise the capital through the issue of 2.70 billion equity shares of face value INR 10, aggregating to INR 27 billion through various modes in one or more tranches during FY26 subject to approval of the shareholders and other statutory approvals.   End

Reported by Priyasmita Dutta and Vaishali Tyagi

Edited by Akul Nishant Akhoury

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