UCO Bank might get capital infusion of Rs.2 billion

February 1st, 2012 - 11:54 pm ICT by IANS  

Kolkata, Feb 1 (IANS) City-based UCO Bank Wednesday said it might get capital infusion of Rs.2 billion-odd from the central government for this financial year.

“We might get some capital from the government… we have been discussing with the government in this regard. We have been waiting for the government’s decision. The amount (of capital infusion) is something Rs.200-odd crore for the current fiscal,” UCO Bank chairman and managing director Arun Kaul told reporters here after announcing the bank’s third quarter result.

“The exact figure is not worked out,” Kaul said.

The public sector bank said its capital adequacy ratio (CAR) currently stood at 12.33 percent under BASEL-II (Tier-I capital 7.79 percent, Tier-II capital 4.54 percent).

Kaul said the bank was not looking into cutting interest rates till the costs came down.

“Immediately no (cut in interest rates)… let wait for what RBI does (in the next monetary policy review). We will not cut the interest rates till our cost comes down,” he stated.

“Our cost of deposits has gone up by 180 basis points compared to last year. That has impacted our net interest income and net interest margin,” Kaul said.

The Reserve Bank of India (RBI) announced a cut in CRR, the proportion of deposits banks set aside with the central bank in cash, by 50 basis points to 5.5 percent at its monetary policy review on Jan 24.

The CRR cut released about Rs 320 billion of liquidity into a cash-strapped banking system.

In its policy review, the apex bank kept key interest rates unchanged.

The next review of monetary policy is on March.

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