Public sector lender, UCO Bank has received a six month extension from RBI for achieving the provision coverage ratio of 70%. The extension received by the bank is till March 31. The bank follows lenders like ICICI Bank and SBI in this case.
Provision coverage ratio (PCR) refers to the amount of money that needs to be kept aside by banks for non performing assets (NPAs).
As UCO Bank has received extension, it now needs to add another Rs 400 crore only to attain the level of 70% PCR. In the first quarter of this fiscal, the PCR of the bank was 58.64% while gross NPAs amounted to Rs 1,929 crore.
The bank had initially sought for extension till September 2011 but it has received the extension till March 2011. The bank also feels that over time proportion of NPAs would also rise and the Rs 400 crore limit may also increase.
SBI has been given relaxation till September 2011 while ICICI Bank has received relaxation of six months only till March 2011.