UCO Bank to give incentives to borrowers

March 6th, 2009 - 9:28 pm ICT by IANS  

Kolkata, March 6 (IANS) The state-owned UCO Bank has decided to provide 50 basis points loan rate cut to borrowers in some sectors as incentives, a top bank official said here Friday.
“We have decided to give incentives of 50 bps to particular sectors like housing, auto and consumer loans. This is a special reduction and an incentive for borrowers who are regular in loan repayments and is available till June 30,” S.K. Goel, chairman and managing director of the bank said in a press meet.

The process of taking application for availing incentives in these sectors started March 1, and will be accepted till June 30.

Till February-end, the bank’s home loan portfolio stood at Rs.55 billion (Rs.5,500 crore) and auto loan at Rs.8 billion (Rs.800 crore), Goel said.

The bank reduced its benchmark prime lending rates (BPLR) from 13 percent to 12.5 percent from March 1, he said, hinting that there can be more such rate cuts by March 15.

“UCO Bank will get an infusion of Rs.450 crore (Rs.4.5 billion) by March 15 that will help to take up our capital adequacy ratio (CAR) to 12 percent,” Goel said. At present, its CAR - the ratio between the minimum capital a bank has to set aside and risks - is 11.6 percent.

UCO Bank is also expected to get another capital infusion of Rs.7.50 billion (Rs.750 crore) by June.

Regarding small and medium enterprises (SME) loan and agriculture loan restructuring, Goel said: “All standard loans given to these sectors as on September 2008 are eligible for restructuring. The accounts will be restructured by June 2009.”

UCO is now sitting on a “surplus liquidity” of Rs.100 billion as of Feb 28.

“The surplus liquidity is in the form of liquid funds, call money market and in instruments from where immediate cash is available,” Goel said.

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