A Report

On
UCO Bank

Submitted by
Yash Yellewar

Enrolment no.
18FMUCHH010223
Overview of Indian Economy and key policies that influence
industry

In Indian context, Contribution of the banking sector to GDP is about 7.7% of GDP.
According to the latest official data about the manpower in the scheduled commercial
banks, nearly 14 lakh people were employed in the banking sector in the country in March
2018.

As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalised and
well-regulated. The financial and economic conditions in the country are far superior to any
other country in the world. Credit, market and liquidity risk studies suggest that Indian
banks are generally resilient and have withstood the global downturn well.
Indian banking industry has recently witnessed the roll out of innovative banking models like
payments and small finance banks. RBI’s new measures may go a long way in helping the
restructuring of the domestic banking industry.
The digital payments system in India has evolved the most among 25 countries with India’s
Immediate Payment Service (IMPS) being the only system at level five in the Faster
Payments Innovation Index (FPII). 

Government Initiatives

 As per Union Budget 2019-20, the Government proposed fully automated GST
refund module and an electronic invoice system that will eliminate the need for a
separate e-way bill.
 Under the Budget 2019-20, Government proposed Rs 70,000 crore (US$ 10.2 billion)
to the public sector banks.
 Government smoothly carried out consolidation, reducing the number of Public
Sector Banks by eight.

 As of September 2018, the Government of India made Pradhan Mantri Jan Dhan
Yojana (PMJDY) scheme an open-ended scheme and added more incentives.
 The Government of India planned to inject Rs 42,000 crore (US$ 5.99 billion) in
public sector banks by March.

Achievements
Following are the achievements of the Government:

 As on March 31, 2019, the number of debit and credit cards issued were 925 million
and 47 million, respectively.
 According to RBI, India’s foreign exchange reserve stood at approximately US$
414.14 billion as of April 19, 2020.
  To improve infrastructure in villages, 204,000 point of sale (PoS) terminals have been
sanctioned from the Financial Inclusion Fund by National Bank for Agriculture &
Rural Development (NABARD).
 Deposits under Pradhan Mantri Jan Dhan Yojana (PMJDY) increased to Rs 1.28 lakh
crore (US$ 18.16 billion) during the week ended April 8, 2020.
 Unified Payments Interface (UPI) recorded 1.25 billion transactions in March 2020,
valued at Rs 2.06 lakh crore (US$ 29.22 billion).

Introduction about the Industry

Modern banking in India originated in the last decade of the 18th century. Among the
first banks were the Bank of Hindustan, which was established in 1770 and liquidated in
1829–32; and the General Bank of India, established in 1786 but failed in 1791. During the
period of British rule merchants established the Union Bank of Calcutta in 1829, first as a
private joint stock association, then partnership. Its proprietors were the owners of the
earlier Commercial Bank and the Calcutta Bank, who by mutual consent created Union Bank
to replace these two banks. Foreign banks too started to appear, particularly in Calcutta, in
the 1860s. Grindlays Bank opened its first branch in Calcutta in 1864. Calcutta was the most
active trading port in India, mainly due to the trade of the British Empire, and so became a
banking centre. The first entirely Indian joint stock bank was the Oudh Commercial Bank,
established in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank,
established in Lahore in 1894, which has survived to the present and is now one of the
largest banks in India. The period between 1906 and 1911 saw the establishment of banks
inspired by the Swadeshi movement. The Swadeshi movement inspired local businessmen
and political figures to found banks of and for the Indian community. A number of banks
established then have survived to the present such as  The South Indian Bank, Bank of
India, Bank of Baroda, Canara Bank and Central Bank of Indiai.e. RBI.
The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal,
paralysing banking activities for months. India's independence marked the end of a regime
of the Laissez-faire for the Indian banking. The Government of India initiated measures to
play an active role in the economic life of the nation. This resulted in greater involvement of
the state in different segments of the economy including banking and finance. The major
steps to regulate banking included:
The Reserve Bank of India, India's central banking authority, was established in April 1935,
and was nationalized on 1 January 1949 under the terms of the Reserve Bank of India Act,
1948.
In 1949, the Banking Regulation Act was enacted, which empowered the Reserve Bank of
India (RBI) to regulate, control, and inspect the banks in India.The Banking Regulation Act
also provided that no new bank or branch of an existing bank could be opened without a
license from the RBI, and no two banks could have common directors.
In the early 1990s, the then government embarked on a policy of liberalisation, licensing a
small number of private banks. These came to be known as New Generation tech-savvy
banks, and included Global Trust Bank, which later amalgamated with Oriental Bank of
Commerce, IndusInd Bank,  Axis Bank, ICICI Bank and HDFC Bank. This move, along with the
rapid growth in the economy of India, revitalised the banking sector in India, which has seen
rapid growth with strong contribution from all the three sectors of banks, namely,
government banks, private banks and foreign banks.

Industry Information

The Indian banking industry plays an important role in the economic development of the
country and is the most dominant segment of the financial sector.
Banks help channel savings to investments and encourage economic growth by allocating
savings to investments that have potential to yield higher returns.
Indian Banking System has been emerged as a fairly well-developed banking system with the
implementation of innovative and latest technology through different classes of banks –
public sector banks, foreign banks, private sector banks, regional rural banks and co-
operative banks with the Reserve Bank of India as the Central Bank. In the banking field,
there has been an unprecedented growth and diversification of banking industry witnessed
in the technology leaden era i.e. 21st Century. Thus the research paper focuses on how the
latest technology and various schemes of Government of India have lead to the
development and growth of the Indian Banking Sector. Innovations in banking sector can be
witnessed through introduction of ATM, NEFT, RTGS, M-Wallet, IMPS, E-Wallet & E-banking
and many more value-added products and services. This paper highlights the development
and growth of banking industry not only by adopting of innovative and latest technology but
also with the various government schemes.
The Indian banking system consists of 20 public sector banks, 22 private sector banks, 44
foreign banks, 44 regional rural banks, 1,542 urban cooperative banks and 94,384 rural
cooperative banks in addition to cooperative credit institutions. As on April 30, 2020, total
number of ATMs in India stood at 210,195 and is expected to reach 407,000 by 2021.
According to Reserve Bank of India (RBI), bank credit and deposits witnessed a growth of
6.18 per cent and 11 per cent to reach Rs 102.45 lakh crore and Rs 138.67 lakh crore,
respectively, in the fortnight ending June 19, 2020. As on June 19, 2020, credit to non-food
industries stood at Rs 101.55 lakh crore, while deposits growth of 11 per cent was
marginally lower compared to growth of 11.3 per cent in the previous fortnight.
Asset of public sector banks stood at Rs 72.59 lakh crore in FY19. According to RBI, India’s
foreign exchange reserve reached US$ 506.83 billion as on June 26, 2020.
Total assets across the banking sector (including public, private sector and foreign banks)
increased to US$ 2.27 trillion in FY19.
Indian banks are increasingly focusing on adopting integrated approach to risk
management. The NPAs (Non-Performing Assets) of commercial banks has recorded a
recovery of Rs 400,000 crore (US$ 57.23 billion) in FY19, which is highest in the last four
years.
 PESTLE Analysis of Industry

Political Factors:
The banking sector looks all powerful — but it’s susceptible to a bigger giant: the
government. Government laws affect the state of the banking sector. The government can
intervene in the matters of banking whenever, leaving the industry susceptible to political
influence. This includes corruption amongst political parties, or specific legislative laws such
as labour laws, trade restrictions, tariffs, and political stability.

Economic factors:
The banking industry and the economy are tied. How income flows, whether the economy is
prospering or barely surviving during times of recession, affects how much capital banks can
access. Spending habits, and the reasons behind them, affect when customers borrow or
spend funds at banks.
Additionally, when inflation skyrockets, the bank experiences the backlash. Inflation affects
currency and its value and causes instability. Foreign investors think twice before providing
their funds when a particular country’s currency value is high.
Exchange rates also affect banks globally — stable currencies such as the US dollar impact
other currencies, spending habits, and inflation rates in other countries.

Sociocultural factors:
Cultural influences, such as buying behaviours and necessities, affect how people see and
use banking options. People turn to banks for advice and assistance for loans related to
business, home, and academics. Consumers seek knowledge from bank tellers regarding
saving accounts, bank related credit cards, investments, and more.
Consumers desire a seamless banking experience. And technology is developing to allow
consumers to buy products easier, without requiring assistance directly from banks.

Technological factors:
Once, it was expected to visit the local bank to make changes to financial accounts. But not
anymore.Technology is changing how consumers handle their funds. Many banks offer a
mobile app to witness accounts, transfer funds, and pay bills on smartphones.
Smartphones can scan cheques, and the bank can process it from their end, at their
location. This change helps to save paper and the need to drive directly to the branch to
handle these affairs.Debit cards are also changing. Chips have been implemented, requiring
users to insert their card into debit machines rather than swiping them. Other countries,
such as Canada, have implemented a “tap” option — tapping the debit card onto the device,
requiring no pin, for a transaction to complete. These changes make it easier on the user to
make purchases without required intrusion from banks.Even banks themselves are utilizing
technology within the workplace. Telecommunicating through virtual meetings is being
embraced. It replaces the need for in-person meetings.

Legal factors:
The banking industry follows strict laws regarding privacy, consumer laws, and
trade structures to confirm frameworks within the industry. Such structures are required for
customers in the allocated country and for international users.
Environmental factors:
With the use of technology — particularly with mobile banking apps — the use for paper is
being reduced. Additionally, the need to drive directly to a branch to handle affairs is
minimized as well.
Many issues are taken care of through mobile apps and online banking services. Consumers
can apply for credit cards online, buy cheques online, and have many of their banking
questions answered online or by phone. Thus, reducing individual environmental footprints.

Industry Life Cycle

The industry life cycle refers to the evolution of an industry or business through four stages
based on the business characteristics commonly displayed in each phase. The four phases of
an industry life cycle are the introduction, growth, maturity, and decline stages. It can be
said that Banking Industry is in Maturity stage. As at the maturity stage, the majority of the
companies in the industry are well-established and the industry reaches its saturation
point,this means that mostcustomers are well aware of the product or service and most
consumer companies or households that are sales prospects will be owning or using the
product. In this stage small number of large companies starts to dominate other companies
and reduce rivalry. During this stageCapital Needs and Investment in the company is
decreased significantlyand companies earn Lower but stable returns.

Porter’s 5 Forces Analysis

Threat of New Entrants:
Despite the regulatory and capital requirements of starting a new bank, between 1977 and
2002 an average of 215 new banks opened each year according to the FDIC. With so many
new banks entering the market each year the threat of new entrants should be extremely
high.  However, due to mergers and bank failures the average number of total banks
decreases by roughly 253 a year.  A core reason for this is, and biggest barrier of entry for
the banking industry is “trust”.
Because the industry deals with other people's money and financial information new banks
find it difficult to start up. Due to the nature of the industry people are more willing to place
their trust in big name, well known, major banks who they consider to be trustworthy.
The banking industry has undergone a consolidation in which major banks seek to serve all
of a customer’s financial needs under their roof. This consolidation furthers the role of trust
as a barrier to entry for new banks looking to compete with major banks, as consumer are
more likely to allow one bank to hold all their accounts and service their financial needs.
Ultimately the barriers to entry are relatively low for the banking industry.  While it is nearly
impossible for new banks to enter the industry offering the trust and full range of services as
a major bank, it is fairly easy to open up a smaller bank operating on the regional level.

Power of Suppliers:
Capital is the primary resource on any bank and there are four major suppliers of capital in
the industry. 
1. Customer deposits. 2. mortgages and loans. 3. mortgage-backed securities. 4. loans from
other financial institutions. 
By utilizing these four major suppliers, the bank can be sure that they have the necessary
resources required to service their customers' borrowing needs while maintaining enough
capital to meet withdrawal expectations.
The power of the suppliers is largely based on the market, their power is often considered to
fluctuate between medium to high.

Power of Buyers:
The individual doesn't pose much of a threat to the banking industry, but one major factor
affecting the power of buyers is relatively high switching costs. If a person has one bank that
services their banking needs, mortgage, savings, checking, etc, it can be a huge hassle for
that person to switch to another bank.
To try and convince customers to switch to their bank they will often times lower the price
of switching, though most people still prefer to stick with their current bank.
The internet has greatly increased the power of the consumer in the banking industry.  The
internet has greatly increased the ease and reduced the cost for consumers to compare the
prices of opening/holding accounts as well as the rates offered at various banks.
ING Direct introduced high yield savings accounts to catch the buyers' attention, then they
went a step further and made it very easy for customers to transfer their money from their
current bank to ING. ING was successful in their attempt because they managed to make
switching costs very low in terms of time and capital.

Availability of Substitutes:
Some of the banking industry's largest threats of substitution are not from rival banks but
from non-financial competitors.
The industry does not suffer any real threat of substitutes as far as deposits or withdrawals,
however insurances, mutual funds, and fixed income securities are some of the many
banking services that are also offered by non-banking companies.
There is also the threat of payment method substitutes and loans are relatively high for the
industry.  For example, big name electronics, jewellers, car dealers, and more tend to offer
preferred financing on "big ticket" items.  Often times these non-banking companies offer a
lower interest rates on payments then the consumer would otherwise get from a traditional
bank loan.

Competitive Rivalry:
The banking industry is considered highly competitive. The financial services industry has
been around for hundreds of years, and just about everyone who needs banking services
already has them. Because of this, banks must attempt to lure clients away from competitor
banks. They do this by offering lower financing, higher rates, investment services, and
greater conveniences than their rivals. The banking competition is often a race to determine
which bank can offer both the best and fastest services, but has caused banks to experience
a lower ROA (Return on Assets).  Given the nature of the industry it is more likely to see
further consolidation in the banking industry. Major banks tend to prefer to acquire or
merge with other banks than to spend money marketing and advertising.

Market Information

Products /Services offered by firms in the banking industry

1. Advancing of Loans
Banks are profit-oriented business organizations. So they have to advance a loan to the
public and generate interest from them as profit. After keeping certain cash reserves, banks
provide short-term, medium-term and long-term loans to needy borrowers.
2. Overdraft
Sometimes, the bank provides overdraft facilities to its customers through which they are
allowed to withdraw more than their deposits. Interest is charged from the customers on
the overdrawn amount.
3. Discounting of Bills of Exchange
This is another popular type of lending by modern banks. Through this method, a holder of a
bill of exchange can get it discounted by the bank, in a bill of exchange, the debtor accepts
the bill drawn upon him by the creditor and agrees to pay the amount mentioned on
maturity. After making some marginal deductions (in the form of commission), the bank
pays the value of the bill to the holder. When the bill of exchange matures, the bank gets its
payment from the party, which had accepted the bill.
4. Cheque Payment
Banks provide cheque pads to the account holders. Account holders can draw cheque upon
the bank to pay money. Banks pay for cheques of customers after formal verification and
official procedures.
5. Collection and Payment of Credit Instruments
In modern business, different types of credit instruments such as the bill of exchange,
promissory notes, cheques etc. are used. Banks deal with such instruments. Modern banks
collect and pay different types of credit instruments as the representative of the customers.
6. Foreign Currency Exchange
Banks deal with foreign currencies. As the requirement of customers, banks exchange
foreign currencies with local currencies, which is essential to settle down the dues in the
international trade.
7. Consultancy
Modern commercial banks are large organizations. They can expand their function to a
consultancy business. In this function, banks hire financial, legal and market experts who
provide advice to customers regarding investment, industry, trade, income, tax etc.
8. Bank Guarantee
Customers are provided the facility of bank guarantee by modern commercial banks. When
customers have to deposit certain fund in governmental offices or courts for a specific
purpose, a bank can present itself as the guarantee for the customer, instead of depositing
fund by customers.
9. Remittance of Funds
Banks help their customers in transferring funds from one place to another through
cheques, drafts, etc.
10. Credit cards
A credit card is cards that allow their holders to make purchases of goods and services in
exchange for the credit card’s provider immediately paying for the goods or service, and the
cardholder promising to pay back the amount of the purchase to the card provider over a
period of time, and with interest.
11. ATMs Services
ATMs replace human bank tellers in performing giving banking functions such as deposits,
withdrawals, account inquiries. Key advantages of ATMs include:
 24-hour availability
 Elimination of labor cost
 Convenience of location
12. Debit cards
Debit cards are used to electronically withdraw funds directly from the cardholders’
accounts. Most debit cards require a Personal Identification Number (PIN) to be used to
verify the transaction.
13. Home banking
Home banking is the process of completing the financial transaction from one’s own home
as opposed to utilizing a branch of a bank.
It includes actions such as making account inquiries, transferring money, paying bills,
applying for loans, directing deposits.
14. Online banking
Online banking is a service offered by banks that allows account holders to access their
account data via the internet. Online banking is also known as “Internet banking” or “Web
banking.”
Online banking through traditional banks enable customers to perform all routine
transactions, such as account transfers, balance inquiries, bill payments, and stop-payment
requests, and some even offer online loan and credit card applications.
Account information can be accessed anytime, day or night, and can be done from
anywhere.
15. Mobile Banking
Mobile banking (also known as M-Banking) is a term used for performing balance checks,
account transactions, payments, credit applications and other banking transactions through
a mobile device such as a mobile phone or Personal Digital Assistant (PDA),
16. Accepting Deposit
Accepting deposit from savers or account holders is the primary function of a bank. Banks
accept deposit from those who can save money but cannot utilize in profitable sectors.
People prefer to deposit their savings in a bank because by doing so, they earn interest.
17. Priority banking
Priority banking can include a number of various services, but some of the popular ones
include free checking, online bill pay, financial consultation, and information.
18. Private banking
Personalized financial and banking services that are traditionally offered to a bank’s digital,
high net worth individuals (HNWIs). For wealth management purposes,
HNWIs have accrued far more wealth than the average person, and therefore have the
means to access a larger variety of conventional and alternative investments.
Private Banks aim to match such individuals with the most appropriate options.

Market Segments

Reserve bank of India, prescribed four broad business segments in the year 2008, viz.
‘Treasury’, ‘Corporate / Wholesale Banking’, ‘Retail Banking’ and ‘Other Banking Business’.
They have also prescribed ‘Domestic’ and ‘International’ as the uniform geographic
segments for the purpose of segment reporting under accounting standard AS-17.

Banking Product Segments

Treasury
Treasury includes the entire investment portfolio comprising of funding and investment
activities. Treasury management refers to the process of management of an enterprise's
holdings, cash and working capital, with the ultimate goal of managing the firm's liquidity
and mitigating its operational, financial, and reputational risk. Treasury Management
provides greater insight and control over complex processes for managing funding, liquidity,
and risk. Large banks have a stronghold on the provision of treasury management products
and services.

Retail Banking
The Retail Banking would include exposures which fulfill the four criteria of orientation,
product, granularity, and low value of individual exposures. These retail exposures are laid
down in the Basel Committee on Banking Supervision document "International Convergence
of Capital Measurement and Capital Standards: A Revised Framework". Orientation Criterion
refers to the exposure is to an individual person(s) or to a small business. Small business is
one where the total annual turnover is less than INR 50 crores. Product criterion exposure
means exposure on specified products specified as revolving credits, lines of credit,
overdrafts, term loans, installment loans, student and educational loans, other leases, and
small business facilities and commitments. It also includes housing loans. Granularity
criterion mandates that the aggregate exposure to one borrower should not exceed 0.2% of
the overall retail portfolio. Further, the ‘Low value of individual exposures’ criterion specifies
the maximum aggregated retail exposure to one borrower at Rs.5 crore.

Corporate / Wholesale Banking

Wholesale Banking includes all advances to trusts, partnership firms, companies and
statutory bodies, which are not included under ‘Retail Banking’.

Other Banking Business

Others banking business segment includes all other banking operations not covered under
above 3 segments. It also covers all other residual operations such as para banking
transactions.

Banking Geographical Segments

Domestic
Consumer and business banking is mostly targeted to domestic customers residing within
the country of registration. Domestic operations are the main market for the majority of
deposits and advances.

International
Although generally, the domestic market is primary revenue source for most of the banks,
banks also have significant global operations nowadays that contribute significantly to their
revenues. Private and other global banks have much larger global operations and most of
the smaller banks in India have comparatively smaller international operations.

Product / Service Differentiation

Price

Price can work both ways, meaning companies can charge the lowest price to attract buyers
that are cost-conscious or charge high according to higher returns.

Exclusivity
Many company provide exclusive services which are available for customers only from that
companies.

Platform

Products and services can be used in different type of platform like online or offline.

Customer focus

Banking services can be classified according to the wants of customers.

Focused differentiation

Focused differentiation refers to the targeting a particular category of customer.

Competitive marketing / sales tactics adopted by firms

1. Target Different Demographics

Most bank marketing strategies target general audiences or wide audiences such as Gen Z,

Millennial or Baby Boomers.

2. Introducing new products

A product is anything that can be offered to a market for attention, acquisition, use or
consumption that might satisfy a want or need. It is a bundle of utilities consisting of various
product attributes and accompanying services. The services are of intangible nature and
banking services are of that nature. The banking professionals develop different dimensions
of products so that the banking services are made attractive, innovative and competitive.

3. Change in Price

Price is the interest, fees and commission charged and paid by the bank. In a highly
regulated market, banks have little option in deciding the prices. In the regulated market,
the RBI prescribed deposit and lending interest rates and the Indian Banks Association took
decision regarding other charges. Through RBI’s credit policy commencements substantial
deregulation has brought in, and now banks have flexibility in their pricing policy. Thus,
liberalisation has brought in almost complete freedom to the banks to decide the price
according to market situations.

4. Wide spread stores

Banks try to open as many branches as possible to reach customers even at their doorsteps
as It give conveniences and comfort to the customers The behavioural profile and efficiency
of the bank personnel is also equally important. No gap in the distribution process would
occur that will hinder smooth flow of services since inconveniences to customers would act
as a demotivational tool that will result in deserting a bank. Conveniences inside the
premises also attract customers to the bank. Therefore it is kept neat, clean and well
furnished. There are many well equipped and air conditioned branches for many banks. But
many others lack proper space, filled with old and worn-out furniture and look unattractive.

5. Promotion

Now-a-days promotion is one of the most used strategies by banks to promote their
company. Promotion plays an important role in promoting banking business. It
communicates with the customers/prospective customers on almost all the aspects of the
marketing mix like advantages of different products, details of how it is delivered, details on
the interest and commission paid and charged by the bank etc. Simultaneously, it persuades
the prospective customers to bank’s products. Thus marketing promotion has two basic
objectives – first one to inform the prospective customers and second one to persuade
them. This could be in various shapes like advertisement, personal interaction and sales
campaign.

6. Digitalisation

In today’s world where most people use mobile phones, banking companies have started
making their own mobile apps, through which one can access most of the services for which
one had to go to the bank. Digitalisation is also promoted by Govt. through ‘Digital India’
initiative.

Company Information
UCO Bank, previously known as United Commercial Bank, is a leading commercial bank in
India. Founded in Kolkata in 1943, UCO Bank is one of the oldest Indian banks as well. UCO
Bank has its presence in all segments of the economy including Industry, Agriculture,
Infrastructure Sector, Service Sector and Trade & Commerce. It works towards becoming
one of the most trusted and admired financial institution as well as the most sought-after
destination for the customers and investors.

UCO Bank has a large number of Service Units (around 2000) located across the nation and
overseas. These also include specialized and computerized branches. It also has its
Correspondents / Agency arrangements all across the world. UCO Bank also carries out
Foreign Exchange Business in more than 50 centers across the nation with 4 Foreign
Exchange Dealing Operations centers.
History of the company

UCO Bank, formerly United Commercial Bank, established in 1943 in Kolkata, is a major

government-owned commercial bank of India. G. D. Birla, an eminent Indian industrialist,
during the Quit India movement of 1942, conceived the idea of organising a commercial
bank with Indian capital and management, and the United Commercial Bank Limited was
incorporated to give shape to that idea. The bank was started with Kolkata as its head office
with an issued capital of ₹2 crores and a paid-up capital of ₹1 crore. Birla was its chairman
and the Board of Directors included eminent personalities of India drawn from many fields.
The bank opened 14 branches simultaneously across India.
After World War II, United Commercial Bank opened several overseas branches. The first, in
1947, was in Rangoon. Branches in Singapore (1951), Hong Kong (March
1952), London (1953), and Malaysia followed. In 1963 the Burmese Government
nationalized United Commercial Bank's three branches there, which became People's Bank
No. 6.
On 15 September 1967, Jalpaiguri Banking and Trading Corporation (JBTC) which had been
established in Jalpaiguri in 1887 (or 1889; accounts differ), made a voluntary transfer of its
assets and liabilities to United Commercial Bank. JBTC had only one office and specialised in
lending against mortgages on tea gardens.
The Government of India nationalised United Commercial Bank on 19 July 1969. The
nationalised bank continued the operations of the overseas branches in London, Singapore,
and Hong Kong. However, Malaysian law forbade foreign government ownership of banks in
Malaysia. Therefore, United Commercial, Indian Overseas Bank, and Indian
Bank contributed their operations in Malaysia to a new joint-venture bank incorporated in
Malaysia, United Asian Bank, with each of the three parent banks owning a third of the
shares. At the time, Indian Bank had three branches, and Indian Overseas Bank and United
Commercial Bank had eight between them.
An act of parliament changed the bank's name to UCO Bank in 1985, as a bank in
Bangladesh existed with the name "United Commercial Bank", which caused confusion in
the international banking arena.
In 1991, Bank of Commerce acquired United Asian Bank; in time CIMB came to own Bank of
Commerce.
In 1998, UCO closed its London branch. Bank of Baroda acquired the assets and liabilities,
but not the personnel, who were made redundant.
During the year 2004-05, the Bank opened 4 new branches and upgraded 7 extension
counters into full fledged branches.
During the year 2006-07, the Bank opened 57 new branches, upgraded 53 extension
counters into full fledged branches and merged the 15 extension counters with the base
branches.
During the year 2007-08, the Bank opened 95 branches in which 66 branches were opened
on January 6, 2008 to commemorate the 65th Foundation Day of the Bank. The Bank
opened 40 new branches, 12 mid corporate branches, upgraded 55 extension counters into
full fledged branches and merged the 13 extension counters with the base branches. During
the year, the company converted two of their existing branches at Kolkata and New Delhi
exclusively for catering to needs of senior citizens and named these branches as 'Senior
Citizen branches'. In April 4, 2007, the Bank opened one representative office at Guangzhou
in China. As at March 31, 2008 the Bank has 1957 branches, two representative offices, 21
mid corporate branches and 19 extension counters. During FY 2013–14, its total business
was ₹ 4.55 lakh crore. Based on 2014 data, it is ranked 1860 on the Forbes Global 2000 list.
UCO Bank was ranked 294th among India's most trusted brands according to the Brand
Trust Report 2014, a study conducted by Trust Research Advisory.[2] It was a rise of 796
ranks considering it was listed at the 1090th position among India's most trusted brands in
the Brand trust Report 2013.[3] As of 30 March 2017 the bank had 4,000 plus service units 49
zonal offices spread all over India. It also has two overseas branches in Singapore and Hong
Kong. UCO Bank's headquarters is on BTM Sarani, Kolkata. As on March 2020 the total
number of employees was recorded at 22,436.

Products / Services offered

Saving Account

UCO Bank offers different savings accounts to customers, each loaded with attractive
features and benefits. With a range of savings bank accounts on offer – from zero balance
accounts, premium accounts, basic accounts, accounts for children and those for defence
personnel, the bank caters to the needs of every individual.

Current Account

UCO Bank offers 2 types of current accounts, namely, UCO Basic and UCO Care Current
Account. The minimum balance requirement depends upon categories such as metro,
urban, semi-urban and rural.

Home Loan

UCO Bank offers home loan at an attractive interest rate starting from 7.15%. A home
loan can be availed for purchase/construction/improvement/extension of a house/flat. Both
Salaried/Non-Salaried and Resident/Non-Resident individuals can apply for UCO Bank Home
Loan. Balance Transfer facility is also available to existing home loan borrowers of another
HFC.

Personal Loan

UCO Bank offers personal loans to self-employed individuals, salaried

individuals/professionals and pensioners through different schemes. UCO Bank personal
loans are currently subdivided into 3 categories – UCO Cash, UCO Shopper Loan Scheme and
UCO Pensioner Scheme. These loans are offered for amounts up to Rs.10 lakh and can be
availed to purchase an consumer durables, pay medical bills, fund travel expenses and much
more.

Loan against Property

UCO Bank offers 3 types of loans against property to its customers which cater to their
financial needs. Customers can avail loan against property at low EMIs and flexible tenures.

Education Loan  

An education loan is one of the most important loans of current times as it not only helps
students pursue their dream of higher studies from the most reputed and recognized
educational institutions but also boosts the knowledge economy of our country. Most of the
banking and financial institutions have realised the importance of scheme for education
loans and therefore they have started offering student loan scheme with many benefits at
lower interest rates.

Fixed deposit

UCO Bank offers various types of fixed deposit schemes to both regular individuals and
senior citizens at attractive interest rates. The bank provides fixed deposit schemes for a
period of 7 days (short-term) to 10 years (long-term). Let’s look at the UCO Bank FD Rates
below.

Recurring Deposit

UCO Bank offers recurring deposit its customers, namely ‘UCO Sowbhagya RD Scheme’ with
a maximum deposit amount of Rs. 1 lakh per month for a period of 12 months to 60
months.

Credit cards

UCO Bank offers credit cards that cater to the needs of Micro, Small and Medium
Enterprises. The cards come with various features and benefits that make transactions
convenient for the users. Details of UCO Bank Credit Card are given below.

Debit Card

UCO Bank offers debit card and Rupay pre-paid card to its customers with no requirement
of minimum balance in their account. With UCO Bank debit card, customers can pay bills
online, shop etc.

Balance inquiry

UCO Bank is a government-owned commercial bank. Customers can perform balance check,
transfer funds, etc. with UCO Bank’s Missed Call service, SMS Banking and Internet/Mobile
Banking. To check UCO Bank Account Balance, account holders can call on UCO Bank
Balance Enquiry Number 18002740123 which is toll-free.

Mobile banking

Mobile banking apps aim to provide you the banking services from the comfort of your
home or office. It saves your time and efforts. The UCO Bank mobile banking app is not
limited to fund transfers, but it provides features to pay utility bills, order food, book a cab,
make e-commerce purchases, and pay an insurance premium, to mention a few. With UCO
mobile banking, you can transfer money through NEFT, RTGS, IMPS, and UPI. You can link
your savings bank account, current bank account and credit cards with UCO Bank mobile
banking app.

Net banking

UCO Bank has added a new facility for the customers by offering them a unique
personalised remote banking experience. With internet banking, customers can have access
to their bank accounts 24×7 and also avail various services such as fund transfer, bill
payments, account statements, etc. However, every account-holder needs to be registered
for Internet Banking to avail online services.

Customer care

UCO Bank is a major public sector bank having its presence throughout India. It provides a
number of banking services and products through online banking and offline banking. UCO
Bank customer care team is quite active and helps customers in getting their issues resolved
and queries answered in very less time. Account holders can contact the UCO Bank
customer care toll-free number to get answers to their queries related to banking services
or products such as deposit accounts, personal loans, home loans, etc. by calling on the
number mentioned below:1800 274 0123
NRI Corner
UCO Bank offers a range of services for the NRIs. Following are the services that NRIs can
choose from:
• Deposit Schemes
• Foreign Currency Non Resident (FCNR-B) Deposits
• Resident Foreign Currency (RFC) Deposits
• Non Resident External (NRE) Deposits
• Non Resident Ordinary (NRO) Deposits
• Remittance to India
• Loans to NRIs
• Against Deposits
• NRI Home Loans
International Banking
Following international banking services are offered;
• Products & Services
 NRI Banking o Foreign Currency Loans
 Finance/Services to Exporters
  Finance/Services to Importers
 Remittances
 Forex & Treasury Services
 Resident Foreign Currency (Domestic) Deposits
 Correspondent Banking Services
 General Banking Services
• Foreign Currency Loans
• Finance/Services to Exporters
• Finance/Services to Importer
• Remittances
• Forex & Treasury Services
 Forex Inter Bank Placements/Borrowings
 Sale & Purchase of currency on behalf of customers
 Forward Cover Bookings
 Cross Currency Swaps
 Interest Rate Swaps (IRS)
 Forward Rate Arrangements (FRAs)
 Forex Money Market Operations
• Resident Foreign Currency (Domestic) A/Cs
• Correspondent Banking Services

Operational Strategies of the firm

UCO Bank has redesigned its strategies to align with the government's 'Aatmanirbhar Bharat'
initiative, with enhanced focus on lending to retail, agri and MSME sectors amid COVID-19 crisis,
according to its annual report. In its 2019-20 annual report, the bank said it is expecting the various
technological initiatives for customer convenie nce to yield "good results" in coming months.
Underlining the fact that the COVID-19 outbreak and the effect of lockdown from late
March to June caused severe adverse impact on all sectors of the Indian economy, including
banking, UCO Bank has redesigned its strategies to implement Aatmanirbhar Bharat
package announced by the central government, to fall in line with the current situation. The
thrust area of the bank is to improve lending to retail, agriculture and micro, small and
medium enterprises (MSMEs). In these tough times, the bank will extend emergency credit
lines, on merits, to the borrowers who were affected by the COVID 19 economic crisis. UCO
Bank has taken up several technological initiatives like migrating to Finacle 10, improving
software of mobile, internet and phone banking. These initiatives in customer convenience
will give good results in coming months.

Main focus
One of the Vision of UCO Bank is to become a place of pride for its employee. With this
vision Bank function and gives utmost importance to its staff members and their wellbeing.
During recruitment in Bank’s service merit and competency is the core criteria for selection.
All candidates are judged according to merit. In promotion process equal opportunities is
being given to all applicants irrespective of caste, creed, gender, race, religion and disability,
if any, as per GOI guidelines and laid down policy of the Bank.
As on 31st March, 2019, the total count of employees is 23,133 out of which 5,787 are
women employees and 485 are persons with disability. It is needless to mention that Bank
does not engage child labour or any form of involuntary labour paid or unpaid. We adhere
to the Government guidelines issued from time to time.

There is liberty to all employees to be a member of any union or not. However, most of the
employees are member of some union.
To enact the vision of the bank for its employee, Bank runs several employee welfare
schemes. It includes Provident Fund, Gratuity, pension, medical benefits, LTC/LFC,
concessionary interest rate advance, higher interest rate on deposits, holiday homes etc.,
are few to site. In this ordeal it includes both the welfare schemes of employee as well as
their family members namely UCO Diamond jubilee Scholarship scheme and Prize Scheme.
Besides this Bank has a policy for option provided to lady officer for change of posting to
their choice zones for joining spouse/in-laws/parents. These welfare measures specially
canteen subsidy, education, medical & hospitalization etc. Besides this Bank along with its
staff members celebrate Independence Day, Republic Day, Bank’s foundation Day together.
Though Bank provides safe, hygienic, humane dignified work place environment to all its
employee but specially for lady employees Bank has established Sexual Harassment
Redressal Committee as well as Grievance Redressal system for all who have made complain
regarding these matters. These measures enable employees to feel safe and secure in
discharging their responsibilities at Bank.
Training is a tool to equip the human resources with adequate job knowledge and skill
besides shaping their behaviour and attitude. Training need is being assessed and
accordingly all the employees are imparted with training at both external Institute and
Bank’s training centres. Bank has one Central Staff College situated at Kolkata Salt Lake and
7 Regional Training Centres at Chandigarh, Bhopal, Durgapur, Jaipur, Chennai, Bhubaneswar
and Ahmedabad. Besides this, to meet emerging demands or region specific training,
locational training is also carried out. This enables the employees to keep their knowledge
updated as well as sharpen the skills. Total 17164 numbers of employees have been trained
in Financial Year 2018-19.

Ratio Analysis
 UCO Bank Bank of State Bank of IDBI Bank
Maharashtra India
Current ratio 2.96 0.42 0.33 7.38
Quick ratio 16.80 7.22 13.84 28.19
Inventory 0.06 0.07 0.06 0.07
turnover ratio
Asset turnover 0.07 0.07 0.07 0.07
ratio
Debt ratio 0.91 0.92 0.12 0.14
Debt/equity 12.39 16.20 17.08 9.42
ratio
Profit margin -16.10 3.38 5.63 -61.88
Return on asset -1.03 0.23 0.36 -4.29

Past Sales & Financial Performance

FY-20 FY-19 FY-18 FY-17 FY-16

ROCE 2.11 1.23 0.63 1.30 1.52
Net profit -16.10 -30.15 -31.64 -11.33 -15.08
margin
Return on -1.03 -1.87 -2.05 -0.79 -1.14
assets
Asset turnover 0.06 0.06 0.06 0.07 0.07
ratio
Current ratio 2.96 3.16 2.94 2.14 1.69
Quick ratio 16.80 18.92 19.94 18.69 18.42
Debt/equity 12.39 18.02 26.00 22.72 24.33
ratio
EPS -3.17 -11.17 -22.93 -14.04 -26.02
Sales 15134.33 14330.63 14020.13 16325.80 18560.97

Future Prospects for growth and profitability

In response to the evolving forces of customer expectations, regulatory requirements, technology,
demographics, new competitors and shifting economics, much of the landscape will change
significantly. Banks need to choose what posture to adopt against this change – whether to be a
shaper of the future, a fast follower, or to manage defensively, putting off change. Staying the same
is not an option.

In the field of technology based banking, information technology and electronic funds transfer
system have emerged as the twin pillars of modern banking development. Products offered by banks
have moved way beyond conventional banking and access to these services have become round the
clock. This, indeed, is a revolution in Indian banking industry.

Payments banks will open another alternative channel after internet and mobile banking, and help
improve efficiencies and reduce costs involved in catering to customers in the rural and semi-urban
areas.

The ‘Digital India Campaign’ launched in July 2015 by the Government of India, with an aim to
ensure that the Government services and subsidy benefits are made available to citizens
electronically by improving online infrastructure and by increasing Internet connectivity will pave
way for technological reforms in India and make the country digitally empowered.

Another extremely important issue is the infrastructure financing. Banks have been the primary
source of funding for the infrastructure sector. Infrastructure advances have grown at a compound
annual growth rate (CAGR) of around 25% in the last 10 years, which is higher than the banking
sector advances growth.

Strategies being pursued for future growth

Public sector UCO bank is planning to open Small Enterprises Sales and Assets Processing
Cell in 14 cities across the country to extend the benefits of various credit schemes offered
by the bank to small business establishments. These special cells would extend credit up to
Rs three crore, besides provide life and non-life insurance and mutual fund investment
plans. Trained bank staff would visit small business units to provide these facilities. The bank
would open such cells in Lucknow, Ludhiana and Hyderabad on pilot basis. Plus business of
Rs 100 crore is expected from Ludhiana alone this year. UCO bank plans to implement Core
Banking Solutions (CBS) in 1,000 branches over the next 3 years and would add 150 ATMs in
this period to take the total number to 200. Out of total branch network of 1,758 branches,
it has introduced CBS in 25 branches and will increase CBS networked branches to 1,000 in
next 3 years. The bank, which had a business of Rs 92,300 crore, will be expected a 20
percent growth in its business in the current fiscal. This expected increase would take the
total business to Rs 1,10,000 crore.

Key Challenges and constraints likely to be faced in the future

A Cultural Shift

From artificial intelligence (AI)-enabled wearables that monitor the wearer’s health to
smart thermostats that enable you to adjust heating settings from internet-connected
devices, technology has become ingrained in our culture — and this extends to the banking
industry.

In the digital world, there’s no room for manual processes and systems. Banks and credit
unions need to think of technology-based resolutions to banking industry challenges.
Therefore, it’s important that financial institutions promote a culture of innovation, in
which technology is leveraged to optimize existing processes and procedures for maximum
efficiency. This cultural shift toward a technology-first attitude is reflective of the larger
industry-wide acceptance of digital transformation.

Rising Expectations

Today’s consumer is smarter, savvier, and more informed than ever before and expects a
high degree of personalization and convenience out of their banking experience. Changing
customer demographics play a major role in these heightened expectations: With each new
generation of banking customer comes a more innate understanding of technology and, as
a result, an increased expectation of digitized experiences.

Millennials have led the charge to digitization, with five out of six reporting that they prefer
to interact with brands via social media; when surveyed, millennials were also found to
make up the largest percentage of mobile banking users, at 47%. Based on this trend,
banks can expect future generations, starting with Gen Z, to be even more invested in
omnichannel banking and attuned to technology. By comparison, Baby Boomers and older
members of Gen X typically value human interaction and prefer to visit physical branch
locations.

Continuous Innovation

Sustainable success in business requires insight, agility, rich client relationships, and
continuous innovation. Benchmarking effective practices throughout the industry can
provide valuable insight, helping banks and credit unions stay competitive. However,
benchmarking alone only enables institutions to keep up with the pack — it rarely leads to
innovation. As the cliché goes, businesses must benchmark to survive, but innovate to
thrive; innovation is a key differentiator that separates the wheat from the chaff.

Innovation stems from insights, and insights are discovered through customer interactions
and continuous organizational analysis. Insights without action, however, are impotent —
it’s vital that financial institutions be prepared to pivot when necessary to address market
demands while improving upon the customer experience.
Cyber-security issues in Banking
The banking sector is the single most targeted area by hackers and fraudsters for obvious
reasons. Casey Merolla says: “Banks face a delicate balance between customer experience
and fraud management: while prevention practices can create friction and a declined
customer is often an unhappy customer, fraud events can result in lost relationships.”
Financial crime costs the global economy $2.1 trillion every year – more than the combined
GDP of Saudi Arabia, Pakistan, Switzerland, and Ireland. AML compliance costs $83.5 billion
a year. Approximately $2 trillion a year is laundered, with only 1% getting caught by
regulators. Fraud detection and security issues are a big, costly headache for the banking
industry. Digital wallets in India are primarily mobile based and thus have inherent risk such
as the following:
 Phishing Fraud
 Sniffing/ Intrusion
 Benefits through misconduct
 Fake KYC
 Application manipulation by authorized user.

Conclusion

UCO Bank is one of India’s largest operating public sector bank which offers wide range of
products and services. The banking sector is poised for explosive growth. In this scenario, it
is imperative that bank adopt technology at an aggressive pace, if they wish to remain
competitive.UCO Bank should follow the same and improve their online platform. UCO Bank
should also emphasis on promotion through advertisement and hoardings and should
participate in Corporate Social Responsibility (CSR) Activities.

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