UCO Bank To Join RBI’s Digital Rupee Pilot In September Quarter

UCO Bank plans to go live on the Reserve Bank of India's retail central bank digital currency (CBDC) pilot during the ongoing July–September quarter, after a prolonged delay. The bank had earlier said it might join the pilot by August 2024, having fallen behind initial timelines.

“All necessary infrastructure, approvals are in place. The application is already on Playstore,” said MD & CEO Ashwani Kumar at a post-earnings press briefing.

The RBI's retail CBDC pilot began on November  31, 2022, in cities like Mumbai and Delhi, with a closed group of users. Eight banks were shortlisted for phased participation.

In the April–June quarter, UCO Bank’s net profit rose 10.3% on year to ₹6.07 billion, supported by strong treasury gains. However, net profit fell 7% sequentially. 

Kumar said treasury income was buoyant in April-June due to the RBI’s front-loaded rate cuts that lowered yields. Treasury income surged 19.5% on year to ₹4.85 billion. The bank expects some trading gains this quarter too, although possibly range-bound.

Steady Loan Growth And Increased Provisions
UCO Bank’s global advances rose 16% on year to ₹2.25 trillion as of June 30, while global deposits climbed 11% to ₹2.99 trillion. Retail advances jumped 31% to ₹561.95 billion and corporate loans rose 15% to ₹740.51 billion. Corporate loan growth is projected at 12–14% in 2025-26.

Provisioning costs were a drag, rising 34.3% on year to ₹6.16 billion, with NPA provisions climbing to ₹4.63 billion from ₹3.97 billion a year earlier. Kumar said retail slippages are expected to stay range-bound.

On recoveries, Kumar said discussions are ongoing with the government and lenders to recover dues from MTNL, which defaulted on loans worth ₹85.9 billion between August 2024 and February 2025. The defaults have been classified as NPAs.

Focus On Fraud Prevention And Capital Plans
UCO Bank is also tightening controls to curb mule accounts, which are often used for laundering or fraudulent activities, Kumar said.

As for fundraising, the bank does not plan to raise capital in the current quarter despite board approval to raise ₹27 billion in 2025-26 via equity issuance. “The quantum and timing are yet to be decided. Government approval will also be sought. Maybe next quarter,” Kumar said.