RBI removes Indian Overseas Bank from PCA framework
- ByManjeet Singh | September 30, 2021
Indian Overseas Bank was recently removed from the PCA (prompt corrective action) restrictions framework by the Reserve Bank of India (RBI), subject to certain conditions.
The Reserve Bank of India said in a statement that it made the decision to lift PCA restrictions on Indian Overseas Bank under certain conditions and with continuous monitoring.
“The performance of the Indian Overseas Bank, currently under the Prompt Corrective Action Framework (PCAF) of RBI, was reviewed by the Board for Financial Supervision. It was noted that as per its published results for the year ended March 31, 2021, the bank is not in breach of the PCA parameters,” the bank said.
RBI further added, “The bank has provided a written commitment that it would comply with the norms of Minimum Regulatory Capital, Net NPA, and Leverage ratio on an ongoing basis and has apprised the RBI of the structural and systemic improvements that it has put in place which would help the bank in continuing to meet these commitments.’’
With this move, Indian Overseas Bank will no longer be subject to the strict lending restrictions imposed by the RBI in October 2015 under PCA which subjects banks with weak financial metrics to business restrictions
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