UCO Bank, a prominent public sector lender based in Kolkata, has decided to withdraw its plan to distribute sweets to its top 10 Non-Performing Assets (NPA) borrowers for Diwali this year. The decision, which was announced in a circular on November 1, has been reversed, as stated in the bank's latest circular issued on November 2.
Initially, the bank had planned to distribute sweet packets to the top 10 NPA borrowers of each branch, following the example set by peer Public Sector Banks (PSBs). The bank's Recovery Department Head Office had suggested that branch heads personally meet and greet these borrowers, fostering a connection between them and the bank. The rationale behind this initiative was to bridge the gap between the bank and its NPA borrowers, acknowledging that these individuals were once valued customers of the institution.
In the circular, the bank highlighted the challenges faced by branch officials in recovering dues from NPA borrowers. It emphasized that not all NPA borrowers are willful defaulters, citing reasons such as business failure, loss, or unavoidable circumstances that lead to accounts becoming NPAs. The bank also acknowledged that conflicts between customers and bank officials sometimes contribute to accounts turning into NPAs.
UCO Bank is gearing up to unveil its financial results for the second quarter of the fiscal year 2023-2024 on November 3, 2023. The bank's performance in the previous quarter showcased a significant improvement, with an 81% surge in net profit, reaching ₹223.48 crore, compared to ₹123.61 crore in the same period last year. The bank also saw a decline in its gross non-performing assets (GNPAs) from 7.42% to 4.48% and a decrease in net non-performing assets (NPAs) from 2.49% to 1.18%. Additionally, the bank's Net Interest Income (NII) increased by 21.78%, rising to ₹2,008.80 crore in Q1FY24.