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Informist, Wednesday, Jul. 22, 2026

 

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--UCO Bank: Pre-mature to say about West Asia war impact on slippages 
--UCO Bank: Have not seen any stress due to West Asia crisis, monsoon 
--UCO Bank: To Further strengthen position in AI for services 
--UCO Bank: Expect deposit growth to pick up going forward 
--UCO Bk: Don't see any need to raise capital, may look to reduce govt stake 
--UCO Bank: Will try to increase NIM to 3% going ahead 
--UCO Bank: Plan to introduce new features under CBDC offering 
--UCO Bank:Aim to raise upto $500 mln via FCNR(B), overseas commercial borrow 
--CONTEXT: UCO Bank mgmt's comments in post-earnings press conference
--UCO Bank: In process to launch GIFT City branch next month

 

MUMBAI/NEW DELHI – UCO Bank is aiming to raise up to $500 million through foreign currency non-resident bank deposits and Overseas Foreign Currency Borrowings, Managing Director and Chief Executive Officer Rajendra Kumar Saboo said Wednesday. "FCNR(B) the timeline is up to Sept. 30 and in Overseas Foreign Currency Borrowings the timeline is even after that also up to Dec. 31, so we are planning to raise up to $500 million out of these two propositions," Saboo at a post-earnings press conference.

 

He said the bank has two overseas branches in Hong Kong and Singapore which may help in mobilising funds under the two schemes. "We have overseas branches in Singapore and Hong Kong also. But as of now, we do not have any leverage product in place. We will see how it pans out," he said.

 

The bank is also in advanced stage of opening its branch in Gujarat International Finance Tec-City, which will be instrumental in raising foreign currency non-resident bank deposits. "We have already received the approvals from all the authorities, and we are in the process of implementation of information technology solutions and once our information technology solutions are in place, we will start Gift City operations maybe in the next month and then maybe certain things of Overseas Foreign Currency Borrowings and this FCNR(B) deposits can be routed through Gift City branch also," Saboo said.

 

Domestic as well as certain foreign banks have increased interest rates on dollar deposits under the FCNR(B) scheme by over 300 basis points after the Reserve Bank of India launched the scheme as the RBI's swap window allows them to price these deposits on a par with domestic liabilities. The regulator did away with caps on offering deposit rates in June, which was seen as a push to maximise inflows.

 

The RBI has also allowed banks to exclude the hedged transactions related to FCNR(B) deposits, external commercial borrowings, and overseas foreign currency borrowings raised under its concessional swap facility from the computation of net overnight open position. The RBI has also offered a concessional hedging rate of 1.50% per annum for external commercial borrowings from public-sector undertakings and overseas foreign currency borrowings by authorised dealer banks through its swap facilities.

 

Earlier in the day, the Kolkata-based lender had reported an 8% on-year rise in its net profit to INR 6.56 billion. The bank's net interest income for the June quarter was up almost 17% on year at INR 28.08 billion.

 

On being asked about the pressure the bank was experiencing due to the ongoing war in West Asia and the expectation of poor Monsoon rains during the year, Sahoo said that it was "premature to say anything about the stress". "Sequentially we have reduced our slippages. Yes, maybe the West Asia position and rising inflation as well as monsoon situation also have their own impact on the economy and the customers. But as of now we have not seen any stress into any sectors, particularly micro, small and medium enterprises," he said.

 

Though the bank's advances grew over 21% on year to INR 2.73 trillion as of Jun. 30, Sahoo sounded conservative and retained a 12-14% guidance for 2026-27 (Apr-Mar). The bank will also continue to maintain a credit-deposit ratio of 80-82% during the year. "We will continue at this level only and our strategy is to raise resources from deposits, particularly current account and savings account...we have launched new saving account and current deposit products also," Sahoo said.

 

The lender has guided for global net interest margin of 2.8-2.9% for FY27. However, Sahoo said the effort will be to keep it around 3%. The lender's global net interest margin rose to 3.05% in the June quarter from 3.00% a quarter ago and 2.96% a year ago.

 

Despite having a healthy capital adequacy ratio based on Basel III norms of 19.03% at the end of June, the bank may look to raise equity capital during the year only to reduce government shareholding. "Our bank's government shareholding is 90.95%. So we have to reduce that to below 75% as per the Securities and Exchange Board of India guidelines," Sahoo said. Earlier this year, the board of the bank had approved raising INR 27 billion equity capital by issuing 2.7 billion shares in multiple tranches during FY27. Securities and Exchange Board of India norms stipulate that all listed companies must maintain at least 25% public shareholding. 

 

Detailing the bank's future plans, Saboo said the lender aimed to introduce new features under Central Bank Digital Currency offering. "We are announcing our Central Bank Digital Currency proposition. Many new features will be launched in Central Bank Digital Currency. So these are our new projects or new products in pipeline," he said.

 

Saboo said, "We have an omni-channel product under development. Right now mobile banking and net banking have different platforms. We are coming with a common omni-channel presence. Then we are going to launch case management services very soon." The bank is also launching credit line on Unified Payments Interface for MUDRA, credit card and overdraft accounts. "We are also exploring and launching many new services, new features into the WhatsApp banking," he said.

 

While the bank is already using artificial intelligence for specific functions, it will further strengthen its capabilities by finding new user cases which can improve services and digital security. "I think this is an evolving thing. And it will take time to come into a very, very larger proportion," Sahoo said. On Wednesday, shares of the bank ended at INR 26.55 on the National Stock Exchange, down over 1% from the previous close.  End

 

Reported by Sagar Sen and Adhithya Aji

Edited by Akul Nishant Akhoury

 

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