UCO Bank Approaches LIC For Equity Infusion

UCO Bank has approached by the Life Insurance Corporation of India for equity infusion, a top official said.

The state-owned company is looking to raise Rs 4,500-5,000 crore in the current fiscal. “Yes, we approached LIC for equity infusion,” UCO Bank Managing Director and Chief Executive Officer AK Goel said.

The lender has sought in excess of Rs 1,000 crore as equity from the insurance major, sources said.

LIC already holds about 4 percent stake in UCO Bank.

In the quarter to June, the bank had raised Tier-II capital aggregating to Rs 500 crore in Basel III-compliant Tier-II bonds to LIC.

During FY14-FY19, the government and LIC together pumped in Rs 3 lakh crore in public sector banks, according to a report by India Ratings and Research.

The government had recently infused Rs 3,330 crore into the bank to improve capital adequacy.

Meanwhile, Goel said it will take a call about passing on the benefit of the Reserve Bank of India's interest rate reduction by 35 basis points. He said the net non performing asset ratio will be down to 6 percent by March, and the provision coverage of bad debt is 77 percent.

Net NPAs of the lender were Rs 8,781.97 crore at the end of the first quarter as against Rs 12,558 crore in the corresponding period a year ago.