Exclusive | UCO Bank to join CBDC pilot project by September 2023, says MD & CEO Ashwani Kumar

Ashwani Kumar, MD & CEO UCO Bank

Kolkata-based UCO Bank will join the Reserve Bank of India's (RBI) Central Bank Digital Currency (CBDC) pilot project by September 2023, MD & CEO Ashwani Kumar told Moneycontrol in an exclusive interview on August 1.

"Yes, we will be joining RBI's CBDC pilot project by September end. Initially, we will only join in the retail segment. Later on, looking at the opportunities, will think about other segments," said Kumar.

The central bank launched the first pilot of the digital rupee on October 31, 2022, in the wholesale segment and identified nine banks as participants.

The nine lenders include the State Bank of India (SBI), Bank of Baroda (BoB), Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC.

A month later, RBI kick-started the pilot for the retail segment as well. The retail digital rupee, or e₹-R, can be used for day-to-day transactions.

Eight banks are participating in the retail pilot project. They are SBI, ICICI Bank, Yes Bank, IDFC First Bank, BoB, Union Bank of India, HDFC Bank and Kotak Mahindra Bank.

Under the pilot project, banks can invite select customers and merchants to try the services through their mobile applications. After this, the users can make peer-to-peer transactions and peer-to-merchant transactions.

Other plans

Kumar added that the bank’s target is to bring down its gross non-performing asset (GNPA) to 3.5 percent and net non-performing asset (NNPA) to less than 1 percent by the end of this year.

The bank's GNPAs had declined to 4.48 percent in Q1FY24 in an absolute figure of Rs 7,355 crore from 7.42 percent, that is Rs 9,740 crore in the corresponding quarter of the previous fiscal. NNPAs fell to 1.18 percent which is Rs 1,877 crore from 2.49 percent, Rs 3,104 crore.

He said UCO's home loan portfolio growth is reasonably good. "For the affordable segment, specifically, we are into a co-lending arrangement. Generally, our funding is towards the affordable segment," said Kumar.

UCO Bank’s home loan portfolio has seen a 23.08 percent YoY growth in Q1FY24, and its vehicle loan and personal loan segments for the period has grown 23.79 percent and 25.93 percent, respectively, YoY.

Kumar said that UCO Bank is planning to expand its current and savings account (CASA) deposits significantly.

UCO Bank had, on July 28, reported an 81percent jump in net profit at Rs 223.48 crore in Q1FY24 from Rs 123.61 crore in the year-ago period.