The Reserve Bank of India (RBI) on Wednesday removed Indian Overseas Bank from its prompt corrective action (PCA) framework, subject to certain conditions and continuous monitoring.
As per the official release issued by the central bank, it read, "... Taking all the above into consideration, it has been decided that Indian Overseas Bank is taken out of the PCA restrictions subject to certain conditions and 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 the breach of the PCA parameters.
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.
PCA is taken when banks breach certain regulatory requirements such as return on asset, minimum capital, and quantum of the non-performing asset.
( With inputs from ANI )
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