Uco Bank to raise Rs 400 cr tier-II capital

Uco Bank is gearing up to raise Rs 400 crore tier-II capital to boost its capital adequacy ratio (CAR).

V Sridar, chairman and managing director, said, "The bank will be raising Rs 400 crore tier-II capital. The instrument combination is yet to be finalised. We are waiting for RBI guidelines regarding selection of new instruments for raising the capital."

He further said the bank might raise capital in tranches. "The bank is all set to initiate fund raising by the end of the current financial year," he added.

"Currently, the bank's CAR is standing at 10.42 per cent. After raising the tier-II capital, it is likely to reach 10.8-10.9 per cent mark," Sridar said.

The bank has targeted a business of Rs 1 lakh crore in the current year, with the half-year business mark touching Rs 80,960 crore. The bank would be targeting retail credit as its engine of growth.

"During the first six months, retail credit growth has been around Rs 1,100 crore. The bank is working hard to boost its retail credit. We will shortly be opening new delivery channels for retail products," he added.

Sridar further informed that the vendor for implementing core banking solution (CBS) would be finalised by November 2005.

"The bank has planned to implement CBS in 1000 branches over the next three years, out of which work in 25 branches would be completed by March 2006," Sridar said.

Boston Consultancy group (BCG) have been appointed to work out organisational restructuring scheme for the bank.

"BCG would come up with organisational restructuring structure by February 2005," he added.

In bancassurance, the Bank had earned commission of Rs 298 lakh during April-September 2005, thereby maintaining its top position in selling Life Insurance Corporation of India's products, said Sridar.

Net non-performing asset stood at 2.62 per cent as on September 2005 which would be brought below 2 per cent, he added.