UCO Bank To Raise $500 Million Through Overseas Borrowings

State-owned UCO Bank is preparing to raise approximately $500 million through a combination of Foreign Currency Non-Resident Bank (FCNR-B) deposits and overseas foreign currency borrowings. Additionally, UCO Bank shares rallied recently after positive Q1 results.

The Kolkata-based lender is tapping the Reserve Bank of India's (RBI) concessional foreign currency funding window introduced on 05 June, which allows banks to swap eligible overseas borrowings with the central bank at concessional rates, significantly reducing their cost of funds.

UCO Bank joins a growing list of lenders that have accessed or are preparing to access the facility, including State Bank of India, ICICI Bank, HDFC Bank, Axis Bank, Bank of Baroda and Canara Bank.

How The Window Has Performed

The RBI's concessional window has attracted approximately $32 billion in inflows in roughly 45 days since its launch, with FCNR-B deposits leading the tally. That already exceeds the approximately $26 billion raised during the 2013 FCNR-B deposit scheme, making it one of the fastest foreign currency deposit mobilisations in Indian banking history.

RBI Governor Sanjay Malhotra confirmed the $32 billion figure in a recent interview, dismissing concerns that the inflows represent recycled existing deposits.

What UCO Bank Said

A UCO Bank official confirmed the $500 million target, saying the bank will raise funds through the Foreign Currency Non-Resident Bank and overseas foreign currency borrowing routes.

The official said the bank continuously explores various options for raising long-term and cost-effective funds in line with its business and regulatory requirements.

UCO Bank Q1FY27 Financial Performance

UCO Bank reported an 8% increase in net profit to ₹656 crore for the June quarter, up from ₹607 crore in the same period last year, as core income improved across the board.

Key numbers for Q1FY27:

• Net profit: ₹656 crore, up 8% YoY from ₹607 crore.

• Total income: ₹8,682 crore, up from ₹7,433 crore.

• Interest earned: ₹6,996 crore, up from ₹6,436 crore.

• Net interest income: ₹2,808 crore, up 17% from ₹2,403 crore.

Also Read - City Union Bank Q1 FY2026-27 Results: Profit Climbs 25% To ₹383 Crore