AMITY LAW SCHOOL KOLKATA

B.Com LL.B (Hons)

SEMESTER 3

MACRO-ECONOMICS (ECON135)

TOPIC: UCO BANK

SUBMITTED TO: Dr DEBALINA SAHA

SUBMITTED BY:

1. SHREYASI BOSE
2. AMALU IYER
3. DEBJYOTI DAS
CONTENT
1. INTRODUCTION
2. BASIC FEATURES OF UCO BANK
3. HISTORY OF UCO BANK
4. SPECIFIC FEATURES PROVIDED BY UCO BANK
5. SPECIFIC SERVICES PROVIDED BY UCO BANK
6. ANALYSIS
7. CONCLUSION
 INTRODUCTION
What is a Commercial bank?

A commercial bank constitutes a financial institution that offers a range of

financial services to its clientele, encompassing loans, certificates of deposits,
savings accounts, bank overdrafts, among others. Their primary avenue of
revenue generation involves extending loans to individuals and accruing interest
on these loans. Commercial Banks dispense various types of loans, including
those for businesses, automobiles, real estate, personal expenditures and
education.

These loans are funded using the funds deposited by their customers across
different types of accounts. The deposited sums function as the bank’s capital,
which is subsequently employed for loans disbursements. Commercial Banks
play a pivotal role in a country’s economy as they facilitate the creation of capital,
the provision of credit and the maintenance of market liquidity. Traditionally,
Commercial Banks are situated within physical locations in urban centres, but the
advent of online banking has led to an increase in virtual banking institutions.

Functions of Commercial Banks:

The functions of Commercial Banks can be broadly categorised into two primary
divisions.

a) PRIMARY FUNCTIONS:
 Accepting deposits: Commercial Banks accept deposits in the form
of savings accounts, current accounts and fixed deposits. Surplus
funds collected from both individuals and businesses are lent out to
meet temporary financial requirements for commercial transactions.
  Providing loans and advances: an integral function of Commercial
Banks is extending loans and advances to entrepreneurs and
businesses, thereby earning interest. This constitutes a principal
source of profitability for banks. In this process, banks retain a
portion of deposits as reserves and lead the remaining sum to
borrowers thought demand loans, overdrafts, cash credit, short-term
loans and similar financial instruments.
 Crediting accounts: when granting credit or loans to customers,
banks do not issues liquid cash. Instead, a bank account is opened
for the customer, and the funds are subsequently transferred to this
account. This mechanism enables the creation of money by the bank.

b) SECONDARY FUNCTIONS:
 Discounting bills of exchange: Commercial Banks engage in the
practice of discounting bills of exchange, which are written
agreements stipulating the payment amount for goods purchased at
a specific future date. These bills can also be settled prior to the
agreed-upon date through a discounting process facilitated by
Commercial Banks.
 Overdraft facilities: Banks offer overdraft facilities to customers,
allowing them to overdraft form their current accounts up to a
predefined limit.
 Purchasing and selling securities: Banks provide services for the
buying and selling of securities, thereby aiding customers in
investment activities.
 Locker facilities: Commercial Banks offer secure locker facilities
to customers for safeguarding valuable possessions of documents,
typically subject to an annual fee.
  Payment and collection of credit: Banks employ various financial
instruments, such as promissory notes, cheques and bills of
exchange, to facilitate the payment and collection of credit on behalf
of their customer.

Types of Commercial Banks:

 Private Banks: These banks are predominantly owned by private

individuals and businesses, with the majority of share capital held
privately. Private Banks are typically incorporated as limited liability
companies. Notable examples include Housing development Finance
Corporation (HDFC) bank, industrial credit and Investment Corporation of
India (ICICI) banks, yes banks among others.
 Public Banks: Public banks are nationalized institutions where the
government holds a substantial stake. Prominent examples encompasses
bank of Baroda, sate banks of India (SBI), UCO bank and Punjab national
banks.
 Foreign Banks: Foreign banks originated from overseas countries and
maintain branches in other nations. Noteworthy instance include American
express banks, Hong Kong and shanghai banking corporation (HSBC),
standard chartered bank and similar institutions.
 BASIC FEATURES OF UCO
BANK
 Banking services: UCO bank provided a wide range of banking services,
including savings accounts, current accounts, fixed deposits and recurring
deposit accounts for individuals and businesses.

 Loan product: The bank offers various loan products, including home
loans, car loans, personal loans, education loans and loans for businesses
and agriculture. These loans come with competitive interest rates.

 Online banking: UCO bank offers internet banking services, allowing

customers to perform various banking transactions online. This includes
checking account balances, transferring fund, paying bills and more.

 Mobile banking: The bank provided mobile banking apps that enable
customers to access their accounts and conduct banking transactions on
their smartphones.

 ATM services: UCO bank has a network of ATMs across the country,
allowing customers to withdraw cash, check account balances and perform
other ATM-related functions.

 International banking: UCO bank offers international banking services,

including foreign exchange services, remittances and foreign currency
accounts.
 Credit cards: UCO bank issues credit cards to eligible customers, offering
credit facilitates and rewards programs.

 Government schemes: The bank participates in various government

schemes digital and initiatives, such as the Pradhan mantra Jan dhan yojana
(PMJDY) and the Pradhan mantra mudra yojana (PMMY), to provide
financial inclusion and support to individuals and businesses.

 Digital services: UCO bank has embraced digitalization, providing

services like e-passbook, online account opening and digital payment
solutions.

 Customer support: The bank typically has a customer support team that
assist customers with their banking queries and concerns.
 HISTORY OF UCO BANK
UCO bank, formerly known as the United Commercial Bank, has a rich history
that spans over a century. UCO bank was founded on January 6, 1943. It was
formed by the merger of four banks: Bengal Central Bank, Comilla Banking
Corporation, Hooghly Bank and Comilla Union Bank. The merger was part of
the government’s initiative to consolidate and strengthen the banking sector in
Indian.

In 1969, as part of the nationalization of banks in Indian, the government of India

acquired a majority stake in UCO bank. This move aimed to promote financial
inclusion and expand banking services to rural and underserved areas.

Over the years, UCO bank expanded its branch network and services across the
country. It played a significant role in supporting economic development and
providing banking services to various sectors of the Indian economy.

UCO bank also established an international presence by opening branches and

representative offices in several countries. The global expansion facilitated
international trade and remittance for customers.

In 1985, the bank changed its name from United Commercial Bank to UCO bank.
The name change aimed to reflect its broader objectives and identity.

UCO bank embraced technological advancements in banking, introducing online

and mobile banking services to provide more convenience to its customers.

The bank participates in various government schemes digital and initiatives, such
as the Pradhan mantra Jan dhan yojana (PMJDY) and the Pradhan mantra mudra
yojana (PMMY), to provide financial inclusion and support to individuals and
businesses.
Like many other banks, UCO bank faced financial challenges and non-
performing assets (NPAs) in the Indian banking sector. Efforts were made to
address these issues and strengthen the bank’s financial health.

SPECIFIC FEATURES PROVIDED BY

UCO BANK

It is quite clear from the history that United Commercial Bank or UCO bank has
always the target of nation development it always targeted the rural economy for
the business of the bank. The founder of UCO bank Mr. G.D. Birla recognized
that it is the rural areas which are actually contributing to the economy and
creating the majority of employment in the nation so investment in such areas
will give high amount of return in the future, so by keeping this thing in mind Mr.
Birla target the rural economy to increase their profit in the future and also
keeping in mind the motive of development of commercial banking sectors in the
rural economy.

SOME OF THE FEATURES OF THE UCO BANK:

Unlike other commercial banks the UCO bank also have some of the similar
features and characteristics they are as follows:

 Profit motive: Unlike other commercial banks UCO bank also aims at
maximizing the amount of profit through its business activity though it
aims at development of the rural economy but it must not be forget that it
is always a commercial bank and not a central or development bank or
charitable institution. This point can be proved with the help of current data
 which that UCO bank has posted its highest ever annual net profit of Rs.
1863.34 crore for the year ended 31/03/2023 as against Rs. 929.76 crore
for the year ended 31/03/2022.

 Growth Motive: Like other commercial banks UCO bank also aims to the
growth and expansion of its branches unlike central banks it don’t restrict
it function to a particular area or state it is considered as one of the fastest
growing banks in India in 6th of January 1943 when it was first established
in Kolkata after that it has expanded significantly. At present it has 390
branches only in West Bengal and over 3224 branches all over the nation.

 Development Motive: Like other commercial banks UCO bank also

follows a development motive, it also want or interested in updating in
technology and also wants to expand their business and want to expand
their reach. After the covid pandemic this bank has started to provide all it
services through digital means which has increase its acceptability.

 General Utility Services: Like other commercial banks UCO banks also
provide general utility services. Except accepting deposits and advancing
loans the bank also provides services like locker facility, letter of credit and
underwritten securities.

This are some of the common features of the UCO bank which is similar
to that of other commercial banks.
SPECIFIC SERVICES PROVIDED BY
UCO BANK
 Rate and Process of Having agricultural Loans: From the birth of UCO
bank it has targeted the rural economy and it is quite clear that rural
economy is based on agriculture and till now the process of receiving
agricultural lone is quite critical for the uneducated or less- educated people
of the rural region. In this particular aspect UCO bank has provides easy
process of receiving lone and lower interest rates so that every person can
get the lone. For example the interest rate for a lone for agriculture is up to
the extent of 3 lakh is 2% and it decrease with the amount of principle.

 Home Banking Services: After the digitalization of India the process of

buying and selling of goods mostly took place on digital platform but there
was a problem from the consumer side that to do online transaction there
is a requirement of having money in the account and for that the consumers
have to go to the banks to deposit money, to make the consumer
comfortable and to help them to avoid the lengthy process of depositing
money UCO bank had come up with the idea of home banking services in
which an agent of the bank will go to the house of the consumer and accept
the amount and credit it into the consumers account without any charger .

 UCO Bank pension Scheme: UCO bank is one of the banks which is
registered with Pension Fund Regulatory and Development Authority
(PFRDA) which means by entering into this program one can earn a
particular amount of money after sixty. If someone has an account with
UCO bank and has entered into this scheme his the bank will debit an
 amount from his or her account as instalment and after attaining that age
that person will get the amount every month, the instalment can be as low
as 100 rupees.

This are some of the specific features of UCO bank which separate it from the
other commercial banks.

ANALYSIS
Primary features such as mobile banking, ATM services, lending loans to the
public are all the basic that a commercial bank in this era needed.

What makes the UCO bank different is their specific services provided to the
public especially those public of rural areas which contributes a lot to the
economic growth by providing employment that the urban public. The profit
motive of UCO bank is developing the rural areas along with a profit in its
business. Even though the growth motive of the commercial banks does not differ
much, the UCO bank also have the similar growth motive which is to the features
provided by the UCO bank is firstly primary and secondly specific. The expand
its branches and it is not restricting this growth just by providing services to a
particular group or area but to a broader mass. The main 3 specific services
provided by UCO bank is rate and process of having agricultural loans, making
it easy for the rural population to access the agricultural loans that is very much
needed in the rural areas as agriculture is the backbone of the Indian economy.
The home banking services provided by the UCO is said to be an effective method
of increasing the usage of bank services by the rural and the ones who are unable
to go to bank by person to deposit. These feature do have drawbacks coming into
light which may bring the bank down. UCO bank also provide pension scheme
where once entered into this scheme one can earn a particular amount of money
after they are addressed as a senior citizen. Entering this scheme is as easy as
opening an account with UCO bank. To bring close to the analysis, the UCO bank
is a stable bank providing stable services with a number of trustees all over the
nation. The services provided by are unique by itself but are also adapted
according to the economic situation of the country. These services helps both the
bank and the banking sector to prosper leading to growth of the economy binding
all the areas of the nation be it urban, urban rural, rural or rural urban.

CONCLUSION
In conclusion, UCO offers an enormous variety of very creative services that give
customers enough choices. The corporation benefits from the thousands of
Indians who trust its brand. Although not the most cutting-edge, it has been
updated in terms of technology; however, UCO needs to start concentrating on
innovative advertising to draw in more inventors from India and other countries
with a significant expansion of the service sector. As a result of the intense
competition in this field, where every business is concentrating on digital
marketing to gain an advantage over rivals, marketing is of utmost importance.
The UCO Bank believes in adopting and adhering to the best corporate
governance practises and continuously evaluating itself against each such
practises in the industry. The Bank understands and respects its fiduciary role and
responsibility to shareholders and works hard to meet their expectations. I believe
that the best board practises, transparent disclosures, and shareholder
empowerment are necessary for creating shareholder value. The cardinal
principles such as independence, confidentiality, and non-disclosure are
important.