# UCO Bank Secures $730 Million via FCNR Deposits to Boost Liquidity The Kolkata-based lender exceeded its $500 million target to support rapid credit growth. - **Source:** [mint - industry](https://www.livemint.com/rss/industry) - **Published:** 2026-10-21 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/0ace0a65-62d8-4036-8e5a-d9b2a915c909 ## Strategic Capital Mobilization UCO Bank successfully raised $730 million through foreign currency non-resident deposits, significantly surpassing its initial $500 million target. This capital injection was essential to support a 24.7% year-on-year growth in advances during the September quarter. By securing these funds, the bank effectively avoided relying on expensive domestic bulk deposits for liquidity. ## Managing Liquidity Requirements The bank utilized the majority of the mobilized foreign currency to meet immediate liquidity needs. Instead of issuing fresh bulk deposits at higher interest rates, management opted to renew maturing deposits. This approach helped maintain cost efficiency while the bank experienced credit growth well above its annual guidance of 12-14%. ## Addressing CASA Challenges Managing Director Rajendra Kumar Saboo identified the mobilization of low-cost current account and savings account funds as a primary challenge for the banking sector. Changing customer investment patterns have forced banks to innovate. UCO Bank is responding by introducing bundled banking products, digital services, and corporate cash management solutions to attract deposits. ## New Institutional Services UCO Bank plans to launch specialized cash management services in the current quarter to capture institutional and corporate current accounts. These services aim to provide liquidity management solutions for companies. Additionally, the bank is promoting a 535-day fixed deposit scheme offering 6.6% interest, with rates reaching 7.1% for senior citizens. ## GIFT City Expansion The bank’s international operations are growing through its new GIFT City branch, which opened on August 10. The branch has already extended $350 million in loans. Currently, 75% of its resources are sourced through borrowings, while 25% comes from deposits, marking a significant step in the bank's international lending strategy. ## Net Interest Margin Performance UCO Bank reported a global net interest margin of 3% for the September quarter, outperforming its annual guidance of 2.8-2.9%. This performance is supported by the repricing of loans linked to the Reserve Bank of India's repo rate. Approximately 66% of domestic advances are currently tied to external benchmark lending rates. ## Asset Quality Improvements The lender has already achieved its full-year asset quality targets ahead of schedule. The gross non-performing asset ratio declined to 1.96% in September, well below the March 2027 target of 2%. Furthermore, the net NPA ratio fell to 0.18%, while the provision coverage ratio improved significantly to 90.88% from 83.68%. ## Future Growth Outlook UCO Bank expects healthy demand across retail, MSME, and corporate sectors despite recent repo rate increases. The bank plans to add 100-110 new branches by the end of the financial year, building on the 18 opened in the first half. Management remains committed to maintaining a balanced portfolio with a 65-66% RAM share. ## Sources covering this story - https://www.livemint.com/industry/banking/uco-bank-730-million-fcnr-deposits-bulk-funds-credit-growth-asset-quality-11792553778517.html — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._