CALCUTTA May 16: Union Finance Minister P Chidambaram on Friday committed recapitalisation funds to UCO Bank at a meeting in New Delhi to finalise the revival plan for the ailing Calcutta-based bank.

The bank was represented by chairman and managing director Sharda Singh and executive director M M Vaish. The unions were also represented.

The revival plan, which Chidambaram had told the bank to draw up in March, would have been cleared earlier but for the political developments at the Centre in end March.

At Friday's meeting, a memorandum of understanding was signed between the unions and the management at which staff re-dedicated itself to the three-year revival plan drawn up jointly.

The MoU was also accepted by the finance minister. The plan, in which the bank has sought a recapitalisation of Rs 150 crore, aims at accelerated growth in business, substantial increase in non-interest income, spending cuts and aggressive recovery of non-performing assets (NPAs).

The bank aims to increase deposits by 20 per cent throughout the plan, non-interest income by 40 per cent in the first year of the plan, 20 per cent in the subsequent years. Credit is proposed to be kept at the level of 45 per cent of deposits.

The bank currently has a gross NPA of 27 per cent of total advances. For the year 1996-97, the bank has estimated a loss of Rs 160 crore. For 1997-98, the bank has projected a net profit of Rs 27 crore and an operating profit of Rs 100 crore.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.