UCO Bank: ECL Norms, M&A Financing & Profit Rise

Kolkata, Oct 17 (PTI) State-run UCO Bank will begin keeping provisions ahead of coming up with its expected credit loss (ECL) requirements, and is eyeing merger and acquisition financing as a growth opportunity, MD and CEO Ashwini Kumar said on Friday.

Kumar, speaking at a post-earning media interaction, said the lender has not yet computed its ECL obligations in entirety, but is implementing measures to maintain a buffer.

“A Rs 1,000-crore provision over the RBI requirement may be utilised for ECL provisions,” he said.

The Reserve Bank had recently announced that the expected credit loss (ECL) framework for provisioning is proposed to be made applicable to all financial institutions from April 1, 2027.

Under the ECL norms, banks will be required to classify financial assets into one of the three categories – Stage 1, Stage 2, and Stage 3 – depending upon the assessed credit losses on them at the time of initial recognition, as well as on each subsequent reporting date and make necessary provisions.

ECL framework of provisioning with prudential floors is proposed to be made applicable to all Scheduled Commercial Banks (excluding Small Finance Banks (SFBs), Payment Banks (PBs), Regional Rural Banks(RRBs)) and All India Financial Institutions (AIFIs) with effect from April 1, 2027.


On merger and acquisition financing, Kumar said the bank views it as an opportunity and aims to tap the segment in the next six to 12 months.

With branches in Singapore, Hong Kong, and a proposed unit at GIFT City, the lender plans to capitalise on cross-border financing opportunities.

The central bank recently provided a framework allowing banks to directly finance acquisitions by Indian corporates, a long-standing demand from the domestic banking sector.

Asked about speculations regarding the formation of three banking groups through public sector bank mergers in the next round of restructuring, Kumar said he had seen such reports, but added that there was no formal or informal communication from the government or the finance ministry in this regard.

UCO Bank on Friday reported 2.82 per cent rise in net profit at Rs 620 crore for the second quarter ended September 30, 2025.

In July-September FY25, the Kolkata-based bank had logged a net profit of Rs 603 crore.

Total business of the bank stood at over Rs 5.36 lakh crore as on September 30, registering an increase of 13.23 per cent year-on-year.