UCO Bank plans to raise Rs 150 cr by September

UCO Bank may raise Rs 150 crore Tier II capital by September, 2005 while planning to infuse Tier I capital to meet the Basel II norms of 12 per cent capital adequacy ratio (CAR).

''We have planned to infuse Tier II capital to the tune of about Rs 150 crore by September,'' V Sridar, chairman of UCO Bank said today.

The bank, which had a CAR of 11.25 per cent in March, 2005, would need fresh infusion of capital in view of the business growth expected this year and the basel II norms.

''We have targeted 30 per cent growth in business to over Rs 1,00,000 crore in 2005-06. As this will bring the CAR down, we will need fresh infusion of capital to maintain the current levels,'' Sridar said.

The bank, therefore, would also look at raising Tier I capital and seek mandate from shareholders, Reserve Bank of India (RBI) and the Centre in this regard.

Sridar, who declined to divulge the amount to be raised as Tier I capital, had earlier said, the bank may not float a IPO for raising Tier I capital. Instead, the bank would await the RBI's decision regarding the classification of instruments and would take a decision after the RBI came out with definition of new instruments which would be considered as Tier I capital.

Meanwhile, the bank has shortlisted vendors for its Rs 170 crore core banking solutions project to be implemeted in 250 branches in the first phase.

Sridar said, the bank has shortlisted two vendors i-Flex and Infosys for its core banking solutions project which would be implemented over next three years.

He said the vendor would be selected by end of this month. UCO Bank has recently completed computerisation of all its 1735 branches across the country.

The bank had also entered into ATM sharing arrangements with State Bank of India and a consortium of banks called 'Mitr' giving its customers access to 8,200 ATMs all over the country.