A peek into recovery mechanism of UCO Bank

Uco Bank is aggressively pursuing a multi-pronged strategy to recover bad debts, demonstrating a comprehensive approach across all organizational levels. The bank’s recovery department has implemented a wide array of measures, from legal actions to specialized settlement schemes, aiming to maximize collections and improve asset quality.

While the bank has seen a decrease in its total cash recovery and upgradation for the fiscal year ending March 31, 2025, reaching ₹1226.58 crore compared to ₹1397.62 crore in the previous year, a significant surge has been observed in the recovery from technically written-off accounts. This crucial segment witnessed a remarkable recovery of ₹2630.61 crore in FY25, a substantial increase from ₹1475.38 crore in FY24. This indicates a strategic shift in focus towards retrieving funds from these previously challenging assets, which directly impacts the bank’s profitability.

Uco Bank’s robust recovery mechanism encompasses a variety of initiatives:

• Aggressive Legal Action: The bank is initiating timely SARFAESI actions, utilizing platforms like BAANKNET (e-Bikray) and LMS for efficient asset sales. Efforts are being made to expedite DM permission for physical possession of mortgaged properties to enhance e-auction success rates. This is further bolstered by the utilization of Enforcement Agents and Recovery Agents to liaise with magistrates for swift physical possession.
• Comprehensive Litigation: Uco Bank is actively filing DRT suits, Civil suits, and suits under Section 138 of the Negotiable Instruments Act to pursue defaulting borrowers.
• Tracing and Asset Attachment: Detective agencies are being employed to trace absconding borrowers and guarantors, as well as to unearth personal properties for attachment through DRT in eligible cases. The bank is also identifying accounts for referral to NCLT and invoking personal guarantees to attach properties.
• Restructuring and Handholding: In eligible cases, the bank is offering restructuring and handholding operations to facilitate resolution.
• One-Time Settlement (OTS) Schemes: Uco Bank is actively promoting OTS in eligible NPA accounts through both its “Lakshya Rin Mukti” and Normal OTS Schemes. The “Lakshya Rin Mukti” scheme, a non-discretionary and non-discriminatory special OTS, was implemented from July 1, 2024, for NPAs and ML (PWO) accounts with outstanding ledger balances up to ₹50.00 lakh as of June 30, 2024, across Doubtful, Loss, TWO, and ML categories. This scheme’s validity has been extended until June 30, 2025.
• “UCO Adalat” Concept: A unique initiative, “UCO Adalat,” has been introduced for one-to-one negotiation with borrowers from Head Office and Zonal Offices through senior executives. These camps, preferably held every third Friday of the month, aim to explore OTS and resolution options.
• Community Engagement: The bank participates in National Lok Adalats for recovery in smaller accounts and organizes special recovery campaigns like “Kishan Karz Mukti Yojana” for KCC borrowers and “Mudra Manthan” for Mudra accounts.
• Credit Reporting and Follow-up: CIBIL updation of default borrowers is being diligently performed. The bank also employs a “War Room” and “Cluster Approach” for regular contact with NPA borrowers, focusing on upgrading soft NPAs and recovering old NPAs.
• Timely Claiming and Monitoring: Timely marking of NPA in respective portals and claiming for all accounts covered under CGTMSE/ECGC are prioritized. Follow-up for the reduction of NIL performing branches is also a key area.
• Wilful Defaulter Declaration: The bank is actively pursuing the declaration of wilful defaults.
• Innovative Outreach: Efforts include early morning field visits to KCC borrowers and robo-calls to NPA borrowers for compromise-based recovery.
• Regular Recovery Camps: Mega Recovery camps are organized at regular intervals to augment NPA recovery.
• Continuous Review: Regular reviews of Zones, high NPA branches, and Asset Management Branches (AMBs) are conducted to monitor progress.

The bank’s consistent efforts have led to a positive trend in its asset quality. Gross NPA has steadily decreased from ₹7726.46 crore (4.78%) on March 31, 2023, to ₹5918.54 crore (2.69%) on March 31, 2025. Similarly, Net NPA has improved significantly from ₹2018.02 crore (1.29%) to ₹1068.31 crore (0.50%) over the same period.

Furthermore, Uco Bank has strengthened its Legal Management System to facilitate effective monitoring of SARFAESI actions and other legal matters, ensuring early resolution of accounts. Mega e-auctions of properties under SARFAESI are also being conducted regularly on BAANKNET ‘e-Bikray,’ a common web portal of PSB Alliance Pvt Ltd.

These comprehensive and sustained efforts underscore Uco Bank’s commitment to improving its asset quality and enhancing its financial health through robust bad debt recovery.

Also See: Diverse recovery mechanisms SBI uses to deal with stressed loans