Mumbai/IBNS: The Reserve Bank of India (RBI) has removed the Prompt Corrective Action (PCA) restrictions from public sector lender UCO Bank after four years.
The decision was taken after the central bank noted that the bank was complying with its rules on regulatory capital, bad loans, and legal ratio, according to a statement issued by the RBI on Wednesday.
Back in 2017, UCO Bank was placed under RBI's PCA framework restrictions due to its poor financial health. It was barred from incurring high risk assets due to high NPA ratios and negative return on assets.
Prompt corrective action is imposed if a bank's net non-performing loans ratio goes over 6% or if the capital requirements to be maintained falls below the prescribed limit, under RBI norms.
UCO Bank has given a written commitment that it will maintain the RBI norms of minimum regulatory capital, net NPA and leverage ratio on an ongoing basis, the regulator said.
It also apprised the RBI of the structural and systematic improvements it has implemented to enable the bank to meet the requirements.
The bank had requested RBI to lift the PCA restrictions after it registered profits for three quarters in FY21.