Government will sell stake in three PSU banks, why this situation came?

The central government can sell stake in three big public sector banks. These three banks are UCO Bank, Punjab and Sindh Bank and Indian Overseas Bank. The government has more than 95% stake in these, the rest is with public investors.

Let us tell you that as per the Minimum Public Shareholding (MPS) rules of SEBI, all listed companies should have at least 25% public shareholding. Keeping this in mind, the government has made a plan to sell its stake.

Live Mint news quoted sources as saying that depending on market conditions, the three banks may conduct multiple rounds of qualified institutional placement (QIP) in FY2026 to meet regulatory requirements.

The government has allowed public sector banks to explore equity dilution this year and time their market offerings strategically, a source said. The stake sale is expected to be between 5-10% of the paid-up equity capital this year.

SEBI gave time till August 2026 to public sector banks to comply with the rule. At the same time, Life Insurance Corporation of India (LIC) was given time till 16 May 2027 to reach 10% public shareholding.

By December 31, 2024, seven of the 12 public sector banks—State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Indian Bank, Union Bank of India and Bank of India—had fulfilled SEBI's MPS requirement.

Bank of Maharashtra and Central Bank of India have not yet taken steps to comply with the MPS rule. Let us tell you that the government has 93.08% stake in Central Bank of India, 79.60% in Bank of Maharashtra, 95.39% in UCO Bank, 98.25% in Punjab and Sindh Bank and 96.38% in Indian Overseas Bank.

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Government will decrease share by 3% in one PSU Bank by March 2025

State-owned UCO Bank announced on Tuesday its plan to raise Rs.2,000 crore through a Qualified Institutional Placement (QIP) during the current quarter. A few days earlier, Punjab & Sind Bank had announced to raise funds via QIP. The government has approved sale of stake in five public sector banks. These Banks will raise funds via QIP.

UCO Bank Managing Director and CEO Ashwani Kumar revealed that the government recently approved the QIP plan. Following this issuance, the Government of India’s stake in the bank, currently at 95.39% (as of December 2024), will decrease by 3%.

The government has extended the deadline for central public sector enterprises and public sector financial institutions to meet the MPS norms until August 2026. Of the 12 public sector banks, five, including UCO Bank, have yet to achieve the required public shareholding. The move aims to comply with the Securities and Exchange Board of India’s (SEBI) minimum public shareholding (MPS) norms, which require listed companies to maintain a public shareholding of at least 25%.

The bank has already appointed merchant bankers and legal advisers and initiated discussions with potential investors such as mutual funds. The QIP will be launched during the ongoing quarter when market conditions are favorable.

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UCO Bank Q3 Profit jumps 27%

Despite 73% higher provisions, state-owned UCO Bank reported a 27% year-over-year increase in net profit for the December 2024 quarter, coming in at Rs 639 crore as opposed to Rs 503 crore in the same period last year.

At Rs 1,586 crore, operating profit was 42% higher than at Rs 1,119 crore. During the quarter, the bank made a provision of Rs 590 crore, compared to Rs 342 crore during the same period last year.

Also Read - Quarterly Results of all banks for Q3FY25

For the quarter, the bank's net interest margin was 3.17%, which was 33 basis points more than it was a year earlier. At Rs 2378 crore, net interest income increased by around 20%.

"We would like to maintain NIM around 3%-3.10% level,' managing director Ashwani Kumar said.

Its asset quality further improved with gross non-performing assets ratio falling to 2.91% at the end of review period from 3.85% a year back. Net NPA stood at 0.63% against 0.98%. Provision coverage ratio stood at 96%.

Uco's gross advances grew 16.44% year-on-year to Rs.2.09 lakh crore while total deposits expanded by 9.36% to Rs 2.80 lakh crore. Its credit-deposit ratio rose to 74.45% from 64.83% in March 2023.

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UCO Bank Local Bank Officer(LBO) Recruitment for 250 posts

Applications are being accepted for the positions of Local Bank Officer at UCO Bank. Candidates who meet the requirements can apply online at ucobank.com, the official UCO Bank website. 250 positions inside the company will be filled via this hiring campaign.



January 16 marks the start of the registration period, which ends on February 5, 2025. Details on eligibility, the selection procedure, and other information are provided below.

Eligibility Criteria

A Degree (graduation) in any discipline from a University recognised by the Govt. of India or any equivalent qualification recognized as such by the Central Government. The candidate must possess valid Mark-sheet / Degree Certificate and indicate the percentage of marks obtained in Graduation while registering for the position. The age limit of the candidate should be between 20 years to 30 years.

Selection Process

The selection process comprises of written test. The question paper will comprise of questions from Reasoning & Computer Aptitude, General/ Economy/ Banking Awareness, English Language and Data Analysis & Interpretation. For each question for which a wrong answer has been given by the candidate one fourth or 0.25 of the marks assigned to that question will be deducted as penalty to arrive at corrected score. If a question is left blank, i.e. no answer is marked by the candidate; there will be no penalty for that question.

Vacancy Details

• Gujarat: 57 posts
• Maharashtra: 70 posts
• Assam: 30 posts
• Karnataka: 35 posts
• Tripura: 13 posts
• Sikkim: 6 posts
• Nagaland: 5 posts
• Meghalaya: 4 posts
• Kerala: 15 posts
• Telangana & Andhra Pradesh: 10 posts
• J&K: 5 posts

Application Fee

The application fee or intimation charges is ₹175/- for SC/ST/PwBD candidates and ₹850/- for all others. Bank Transaction charges for Online Payment of application fees/ intimation charges will have to be borne by the candidate. Fee/ Intimation charges once paid will not be refunded on any account nor can it be held in reserve for any other exam or selection.

Detailed Notification Click Here 

Direct link to apply click here 

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Government plans to sale stake in five PSU banks

A Rs.10,000 crore fund-raising plan for five state-run institutions via the Qualified Institutional Placement (QIP) route has been approved by the government.



According to sources, four additional lenders—Punjab & Sind Bank, Indian Overseas Bank, UCO Bank, and Central Bank of India—have been given permission to raise money in addition to the Bank of Maharashtra. According to the sources, these lenders may begin raising money in tiny installments as early as the fourth quarter of the 2025 fiscal year.

"The Department of Disinvestment and Public Asset Management (DIPAM) has also been mandated to sell a stake in these lenders through the Offer For Sale (OFS) route," the sources noted.



By August 2026, the government hopes to have a minimum of 25% of these PSU banks' shares held by the general people. The Department of Financial Services has administrative authority for state-run lenders.



According to the most recent shareholding pattern on the BSE, the government owns 79.6% of Bank of Maharashtra, 98.25% of Punjab & Sind Bank, 96.38% of Indian Overseas Bank, 95.39% of UCO Bank, and 93.08% of Central Bank of India as of the end of the December quarter.Based on the current share price, the excess government stake in these five lenders stands at nearly Rs.50,000 crore.

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UCO Bank Q2 Net profit rises 50%

 

State-owned UCO Bank Ltd on Saturday (October 19) reported a 50% year-on-year (YoY) jump in net profit at ₹602 crore for the second quarter that ended September 30, 2024. In the corresponding quarter of the previous fiscal, UCO Bank posted a net profit of ₹401.7 crore, the bank said in a regulatory filing.

Net interest income (NII), which is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors, increased 20%, coming at ₹2,300.4 crore against ₹1,916.5 crore in the corresponding quarter of FY24.

The gross non-performing asset (GNPA) stood at 3.18% in the September quarter against 3.32% in the June quarter. Net NPA came at 0.73% against 0.78% quarter-on-quarter.

Net interest income (NII), which is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors, increased 20%, coming at ₹2,300.4 crore against ₹1,916.5 crore in the corresponding quarter of FY24.

The gross non-performing asset (GNPA) stood at 3.18% in the September quarter against 3.32% in the June quarter. Net NPA came at 0.73% against 0.78% quarter-on-quarter.

In monetary terms, gross NPA stood at ₹6,293.86 crore against ₹6,420.12 crore quarter-on-quarter, whereas net NPA came at ₹1,406.44 crore against ₹1,473.42 crore quarter-on-quarter.

The bank's Net Interest Margin (NIM) for Q2 of FY25 stood at 3.10%, showing an improvement from 2.84% in the corresponding quarter of the previous year. For the first half of FY25, the NIM was 3.09%, compared to 2.92% for the same period in FY24.

The total business of the bank stood at ₹4,73,704 crore as of September 30, 2024, showing an increase of 13.56% year-on-year, wherein Gross Advances increased by 18% to ₹1,97,927 crore on year-on-year and total deposits grown by 10.57% on year-on-year to ₹2,75,777 crore. Operating profit for the quarter ended on September 30, 2024, stood at ₹1,432 crore showing an increase of 45.82% on year-on-year basis.

Advances in the Retail, Agriculture & MSME (RAM) sectors of the bank increased by 20.16 % to ₹1,08,200 crore on a year-on-year backed by 29.36% year-on-year growth in retail advances,17.41% year-on-year growth in Agriculture advances and 11.32% year-on-year growth in MSME advances. Capital Adequacy Ratio (CRAR) stood at 16.84% as of September 30, 2024, with a Tier I Capital Ratio of 14.59%.

UCO Bank reported a Credit to Deposit Ratio of 71.77% as of September 30, 2024. The bank's total business grew by 13.56% year-on-year, reaching ₹4,73,704 crore, up from ₹4,17,145 crore on September 30, 2023. Total deposits increased by 10.57% year-on-year to ₹2,75,777 crore, compared to ₹2,49,411 crore a year ago.

Gross advances saw robust growth, rising 18% year-on-year to ₹1,97,927 crore, up from ₹1,67,734 crore in the previous year. Business per employee also improved, reaching ₹22.10 crore during Q2 of FY25, up from ₹19.06 crore in the same period of the prior year.

UCO Bank's retail advances reached ₹47,039 crore as of September 30, 2024, marking a strong 29.36% year-on-year growth, driven by its home and vehicle loan portfolios. Home loans grew by 18.98%, while vehicle loans surged by 38.66% year-on-year.

Additionally, the bank’s agriculture advances rose by 17.41% year-on-year, reaching ₹26,987 crore as of September 30, 2024, up from ₹22,985 crore in the previous year.

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UCO Bank Q1 Net profit jumps 147%

Kolkata-headquartered UCO Bank on Monday reported a 147% year-on-year (y-o-y) rise in its net profit for the quarter ended June 2024 at Rs 551 crore, led by higher other income, and interest margin.

The lender’s non-interest income grew 32% y-o-y to Rs 835 crore during Q1FY25, whereas net interest income (NII) was up 12% y-o-y at Rs 2,254 crore. Global net interest margin (NIM), too, rose to 3.09% in the reporting quarter from 2.86% a year ago. The lender is aiming to maintain its NIM in the 2.9%-3% range going ahead, MD & CEO Ashwani Kumar said at a post results conference.

Overall advances of the bank were up 18% y-o-y to Rs 1.93 trillion as in June-end. Retail, agriculture and MSME (RAM) loans formed 61% of the lender’s loan book and grew 19% y-o-y, whereas corporate loans rose 20% y-o-y to Rs 64,611 crore. The bank aims to grow its loan book by 12%-14% in the current fiscal.

On liabilities side, UCO Bank’s deposits grew 7% y-o-y to Rs 2.68 trillion. The lender’s credit-deposit (CD) ratio, accordingly, moved up by 628 basis points (y-o-y) to 72% in Q1FY25. The state-owned bank is comfortable with its CD ratio touching 75% mark and has simultaneously introduced new deposit schemes to attract retail deposits. The bank is targeting to grow deposits by 8-10% in FY25.

UCO Bank’s asset quality also improved, with gross bad loan ratio falling by 116 basis points (bps) y-o-y to 3.32% and net non-performing asset ratio (NNPA) moderating by 40 bps to 0.78% in Q1FY25.

Lastly, the MD said the bank will likely raise Rs 2,000 crore in Q2FY25 or Q3FY25 via equity, which will dilute the government’s stake in the bank by 2%-3%. The Centre held 95% stake in UCO Bank as of June 2024.

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Latest Bank Merger News : 4 PSU Banks likely to be merged

According to sources, the government has formulated its plan for the second round of merger of PSU banks. The government is considering two options for merging four small government banks. To facilitate the merger, changes are being prepared in the Banking Regulation Amendment Act. One option is to merge UCO Bank, Bank of Maharashtra, Punjab & Sind Bank, and Central Bank of India.

The second option involves merging with Union Bank of India, Canara Bank, or Indian Bank according to the banking software. 

The government aims to make these changes in the Banking Regulation Amendment Act to facilitate the merger process. 

The functioning of UCO Bank, Punjab & Sind Bank, Bank of Maharashtra, and Central Bank has shown improvement in the past few years. This is a developing story.

Let us tell you that the government has a 98.25 per cent stake in Punjab & Sind Bank.

While the government has a 93.08 per cent stake in Central Bank, 86.46 per cent in Bank of Maharashtra and a 95.39 per cent in UCO Bank.

The government had announced the merger of 10 public sector banks into four entities in 2019.

This was part of the government's policy to strengthen public sector banks (PSU Bank Mergers) to strengthen their finances for a strong national presence and global reach.

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