Qualitative Assessment of LCR data and Result :
Liquidity Coverage Ratio (LCR) has been introduced with the objective to ensure that Bank maintains an adequate level of unencumbered High Quality Liquid Assets (HQLAs) that can be converted into cash to meet its stressed outflows for next 30 calendar day time horizon. RBI mandates Banks to maintain minimum LCR of 100% at Bank level.
Accordingly; Bank is disclosing the LCR at Bank level. The Bank is having two overseas branches at Hong Kong and Singapore for which there is no separate LCR requirement.
High Quality liquid Assets (HQLA): Our HQLA comprises of
following
• Level 1 Assets
1. Cash in hand including Cash Reserve in excess of CRR
2. Govt. Securities in Excess of Mandatory SLR
3. Marginal standing Facility up to 2% of Net Demand and Time Liabilities in the form of SLR securities.
4. Facility to Avail Liquidity for liquidity Coverage Ratio up to 16% of Net Demand and Time Liabilities in the form of SLR securities.
• Level 2 Assets (Not issued by Banks/Financial Institution)• Level 2A assets - With Haircut of 15%
1. Marketable securities representing claims on or claims guaranteed by Sovereigns Public Sector Entities (PSEs) having risk weight 20%
2. Corporate Bonds and Commercial Papers having minimum rating of AA-
• Level 2B assets - With Haircut of 50%
1. Securities issued or guaranteed by sovereigns having risk weight higher than 20% but not higher than 50% (i.e. Bonds with Rating AA & A)
2. Corporate Debt Securities (including Commercial Paper) having external rating between A+ and BBB-
3. Common Equity Shares Included in NSE CNX Nifty index and/or S&P BSE Sensex index
Composition of HQLA: : The Bank during the three months ended 31st March 2025 maintained average HQLA of Rs.61461.36 crore of which Level 1 Assets contribute to approximately 99.80% of the total stock of HQLA. Level 1 assets are more stable form of asset with no or lower haircut for meeting any cash outflow. Facility to avail Liquidity for Liquidity Coverage Ratio (FALLCR) constitutes the highest portion to HQLA i.e. around 74.30% approx. of the total average HQLA as on
31.03.2025.
The percentage of weighted excess SLR to total HQLA has increased from 13.37% as on 31.12.2024 to 15.46% as on 31.03.2025 as Borrowing as a percentage of unweighted total cash outflows decreased from 2.82% as on 31.12.2024 to 1.54% as on 31.03.2025.
Level 2 assets which are lower in quality as compared to Level 1 assets constitute 0.20% of the total stock of HQLA against maximum permissible level of 40%.
Concentration of Funding Sources: Our Funding sources is well diversified comprising mainly of :
• Non-maturing deposits (Current Deposit/ Saving Deposit)
• Term Deposit of which majority portion is from Retail Customers.
Funding Profile: Retail Deposits along with Deposits from Small Business Customer put together contribute around 34.97% of total weighted Cash outflow (62.56% of total un-weighted Cash outflow) as on 31.03.2025. Deposits from Non-financial Corporates, Central Banks, Multilateral development banks and PSEs contribute to 35.57% of total weighted Cash outflows (15.84% of total un-weighted Cash outflows) as on 31.03.2025.
The percentage of Unweighted Liability from Other Legal entity to Total Un-weighted Cash outflows stood at 2.62% as on
31.03.2025.
Bank is monitoring the funding sources on regular interval with the objective to monitor/reduce the concentration of funds having lower stability. Bank also monitors the concentration of top 20 depositors on regular intervals.
Bank has also placed trigger limit which is above the minimum LCR regulatory requirement of 100% so that the Bank initiate corrective actions to ensure that Bank LCR remains above Regulatory ceiling of 100%.
Qualitative Disclosure:Background:
Net Stability Funding Ratio (NSFR) guidelines ensure reduction in funding risk over longer duration time horizon by requiring bank to fund their assets with sufficiently stable resources of funding in order to mitigate the risk of funding stress. The NSFR is defined as the amount of available stable funding relative to the amount required stable funding. RBI has issued the regulations on the implementation of Net stability funding Ratio in May 2018 with minimum requirement of equal to at least 100%. The implementation is effective from 01st October 2021.
Objective of NSFR:
The objective of NSFR is to ensure that Bank maintains a stable funding profile in relation to the assets requiring stable funding. A sustainable funding structure is intended to reduce the probability of erosion of bank's liquidity position due to disruptions in bank's regular sources of funding that would increase the risk of its failure and potentially lead to broader systemic stress.
Definition of NSFR:
The NSFR is defined as the amount of Available Stable Funding (ASF) relative to the amount of Required Stable Funding (RSF).
Computation of NSFR:
The NSFR is computed as follows:
Available Stable FundingNSFR = ...................................... >= 100%
Required Stable Funding
The above ratio should be equal to at least 100% on an ongoing basis. The NSFR is binding on Banks w.e.f. 01.10.2021 and quarterly filing in RBI portal is mandatory. Accordingly, we have uploaded NSFR in RBI portal for 31.03.2025
"Available Stable Funding" (ASF) is defined as the portion of capital and liabilities expected to be reliable over the time horizon considered by the NSFR, which extends to one year.
Example:
a) Total regulatory capital (excluding Tier 2 instruments with residual maturity of less than one year).
b) Other capital instruments and liabilities with effective residual maturity of one year or more.
c) Stable & less stable non-maturity (demand) deposits and term deposits with residual maturity of less than one year provided by retail and small business customers (it is considered more stable than deposits from large corporates/ institution)
d) Funding with residual maturity of less than one year from sovereigns, PSEs, and multilateral and national development banks.
"Required Stable Funding" (RSF) is a function of the liquidity
characteristics and residual maturities of the various assets
held by that institution as well as those of its Off-Balance Sheet
(OBS) exposures.
Example:
a) Unencumbered Level 1 assets, excluding coins, banknotes, CRR and SLR Securities
b) Unencumbered Level 2A & Level 2B assets
c) All other assets not included in the above categories with residual maturity of less than one year, including 'standard' loans to non-financial corporate clients, to retail and small business customers, and 'standard' loans to sovereigns and PSEs
d) Unencumbered 'standard' residential mortgages with a residual maturity of one year or more and assigned the minimum risk weight under the Standardized Approach
e) Other unencumbered performing loans with risk weights greater than 35% under the Standardized Approach and residual maturities of one year or more, excluding loans to financial institutions.
f) All other assets not included in the above categories, including non-performing loans, loans to financial institutions with a residual maturity of one year or more, non-exchange-traded equities, fixed assets, items deducted from regulatory capital, retained interest, insurance assets, subsidiary interests and defaulted securities.
UCO Bank's Position:
Bank is maintaining NSFR much above the maximum regulatory required ratio which shows Bank has sufficient stable source of fund to manage its fund requirement.
c) Sale and transfers to/from HTM category:
The value of sales and transfers of securities to/from HTM Category, excluding the one-time transfer of securities undertaken by the Bank with the approval of Board of Directors, has not exceeded 5 % of the book value of Investments held in HTM Category at the beginning of the year.
e) Divergence in Asset Classification and Provisioning: Banks shall make suitable disclosures as tabulated below, if either or both of the following conditions are satisfied:
i) The additional provisioning for NPA assessed by Reserve Bank of India as part of its supervisory processes, exceeds five per cent of the reported profit before provisions and contingencies for the reference period and
ii) The additional Gross NPA identified by the Reserve Bank of India as part of its supervisory process exceed five percent of the reported incremental Gross NPAs for the reference period.
iii) Disclosure of transfer of loan exposures:
Details of loans transferred/acquired during the financial year ended on 31.03.2025 under the RBI Master Direction on Transfer of Loan Exposures dated 24.09.2021 are given below:-
i) The details of Non-Performing Assets (NPAs) transferred are as under:
(Rs. in Crore except number of accounts)
e) Intra-group exposures - Nil
f) Factoring Exposures - Nil
g) Unhedged foreign currency exposure
In terms of RBI Guidelines, our Bank has framed a policy on 'Unhedged Foreign Exchange Exposure by borrowers including SMEs and Corporates duly approved by the Board. The policy inter-alia provides for:
• Monitoring and review of Unhedged Foreign Currency Exposure (UFCE) of all customers including SMEs.
• Incremental capital and provisioning requirements for exposures to entities with Unhedged Foreign Currency Exposure.
• Stipulation of UFCE Charge in order to provide protection and discourage entities having UFCE.
Based on the available data and financial statements and the declaration from borrowers, the bank has estimated the liability of Rs. 57.22 Lakhs as on 31.03.2025 on Unhedged Foreign Currency Exposure (UFCE) to their constituents in terms of RBI Circulars and our Board approved policy and provision for the same has been provided in the books.
c) Disclosures on risk exposure in derivatives I) Qualitative disclosures-
i) The Structure and organization for management of risk in derivatives trading:
The organization structure consists of Investment Wing at the Corporate level which report to the Executive Directors, Chairman & Managing Director and ultimately to the Board. Risk Management Department is informed of the transactions as and when they take place.
ii) The scope and nature of risk measurement, risk reporting and risk monitoring systems:
a) The Interest Rate Swap (IRS) transactions undertaken by the Bank are for hedging and trading purposes. Derivative as a product is also offered to the customer as per RBI norms. Such transactions are undertaken as per policies of the Bank formulated based on RBI guidelines.
b) The risk is measured in the interest rate derivative transactions depending on the movement of benchmark interest rates for the remaining life of the interest rate swap contracts. All interest rate derivative transactions are included for the purpose of risk measurement. The risk is evaluated and reports are placed to the CMD/ED daily and Board periodically. Risk is monitored based on the mark to market position of the interest rate derivative transactions.
(iii) Policies for hedging and /or mitigating risk and strategies and processes for monitoring the continuing effectiveness of hedges/ mitigates:
IRS is undertaken on the actual interest bearing underlying assets or liabilities. The notional principal amount and maturity of the hedge does not exceed the value and maturity of underlying asset/liability. The risk is monitored on the mark to market basis of the outstanding interest rate swap contracts and accordingly the effectiveness of the hedge is determined.
Collateral required upon entering into IRS is Nil. Notional principal amount of IRS multiplied by the relevant conversion factor and the respective risk weight of the counter party has been taken into account for determining the capital requirements.
(iv) Accounting policy for recording hedge and non-hedge transactions; recognition of income, premiums and discounts; valuation of outstanding contracts; provisioning, collateral and credit risk mitigation:
The accounting policies for recording swaps is as per our extant derivative policy. It defines accounting entries to be undertaken on trade date, interest accrual, intermittent interest settlement date, revolution date and termination date.
For recognition of income, premiums and discounts, valuation of outstanding contracts, provisioning, collateral and credit risk mitigation is as per our Bank's Derivative Policy.
(vi) Other Disclosures for Interest Rate Swaps:
The Bank has undertaken fixed to floating and floating to fixed interest rate swaps on underlying assets and liabilities. The loss of income on the above IRS will be Rs.15.16 Cr, in case counter-parties fail to fulfill their obligations. There is no concentration of credit risk arising from IRS transactions undertaken as the counter-parties are the Clearing Corporation of India Ltd. and the exposure is within the exposure limit permitted.
12. Disclosure of penalties imposed by the Reserve Bank of India
During the Financial Year from 01.04.2024 to 31.03.2025, Reserve Bank of India, in exercise of powers conferred under Section 47(A)(1)(c) read with Section 51 and 46(4)(i) of the Banking Regulation Act, 1949, has imposed a penalty of Rs.2,69,05,770.00 (Two Core Sixty Nine Lakhs Five Thousand Seven Hundred Seventy only) for other than currency chest operations. There is no penalty from other than RBI Regulator.
During the Financial Year from 01.04.2024 to 31.03.2025, Reserve Bank of India, in exercise of powers conferred under Section 47(A)(1)(c) read with Section 51 and 46(4)(i) of the Banking Regulation Act, 1949, has imposed a penalty of Rs. 40,29,118.63 (Forty lakh Twenty Nine Thousand One hundred Eighteen & Paise Sixty Three only) for Currency Chest Operations only.
f) Implementation of IFRS converged Indian Accounting Standard (IND AS)
Background:
Scheduled Commercial Banks (SCBs), excluding Regional Rural Banks (RRBs), were required to implement Indian Accounting Standards (Ind AS) from April 1, 2018 vide RBI Circular dated February 11, 2016. However RBI has deferred implementation of Ind AS till further notice due to the legislative amendments as recommended by RBI are under consideration of the Government of India vide its notification dated 22.03.2019. RBI vide email dated 8th August'2021 decided to reduce the frequency of Ind AS proforma financial statement submission from quarterly to half yearly. Accordingly, Banks are advised to submit proforma Ind AS based financial statements for the half year ending September 30 and full year proforma Ind AS based financial statements for March 31.
Progress on IND AS implementation:
Bank has submitted the Proforma IND-AS Financial statements to Reserve Bank of India with reconciliation of change in Equity & profit on half yearly basis and last submitted on November 30, 2024 for the half year ended September, 2024 compared with the previous GAAP figures
h) Disclosure on amortisation of expenditure on account of enhancement in family pension of employees of banks
During the FY 2024-25, there was no additional liability on account of revision in family pension consequent to the 11th Bipartite Settlement and Joint Note dated November 11, 2020 as Bank had already charged the entire additional liability on account of revision in family pension upto the year ended 31 st March 2023. As on 31st March 2025, unamortized provision is Nil.
i) MSME Restructured Accounts:
a) In accordance with the RBI Circular No. DBR.No.BP.BC.18/ 21.04.048/2018-19 dated 01.01.2019, DOR.No.BP.BC.34/ 21.04.048/2019-20 dated 11.02.2020 and RBI/2020-21/17 DOR.No.BP.B C/4/21.04.048/2020-21 dated 06.08.2020 on Micro, Small and Medium Enterprises (MSME) sector -Restructuring of Advances, the details of MSME restructured accounts as on 31st March 2025 are as under:
b) Disputed demand as per orders passed by Income Tax/ service tax/GST Department on account off income tax, GST and Service tax has been shown in schedule 12 under Contingent Liability. No provision has been considered necessary by the Management as matters are pending for disposal before various Competent Authorities.
* This shall contain the cumulative amount since the RE started offering green deposits. For example, if a bank has commenced raising green deposits from June 1,2023, then the annual financial statement for the period ending March 31,2025, would contain particulars of deposits raised and allocated from June 1, 2023, till March 31, 2025. Further, the actual amount of green deposits raised during the year and use of such funds shall be given under this disclosure.
**Under each category, REs may provide sub-categories based on the funds allocated to each sub-sector. For example, REs may provide sub-categories like solar energy, wind energy, etc. under "Renewable Energy"
15. The bracketed figures indicate previous year's figures. Previous year's figures have been re-grouped /re-arranged/ re-casted wherever considered necessary.
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