Shares of UCO Bank on Thursday zoomed over 16 per cent after the Reserve Bank removed the company from its Prompt Corrective Action Framework (PCAF) following improvement in various parameters and a written commitment that the state-owned lender will comply with the minimum capital norms.
The stock jumped 15.92 per cent to Rs 14.85 on the BSE.
At the NSE, it climbed 16.40 per cent to Rs 14.90.
On a review of the performance of the UCO Bank, the Board for Financial Supervision on the basis of the published financial results for 2020-21, found that the bank was not in breach of the PCA parameter, the RBI said in a statement on Wednesday.
The bank, it said, has also 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 lender has also apprised the RBI of the structural and systemic improvements that it has put in place, which would help the bank in continuing to meet the financial commitments.
“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 said.
The Kolkata-headquartered lender was under PCA since May 2017.
PCA is triggered when banks breach certain regulatory requirements such as return on asset, minimum capital and quantum of the non-performing asset.
The restrictions disable banks in several ways to lend freely and force them to operate under a restrictive environment that turns out to be a hurdle to growth.