Thursday, 28 October 2021

RBI remove Indian overseas bank from PCA Framework restrictions

RBI remove Indian overseas bank from PCA Framework restrictions

On September 29, RBI announced that it has lifted the curbs on Indian Overseas Bank and taken the bank out of the Prompt Corrective Action (PCA) framework, the central bank said in a release.

The board for financial supervision reviewed the performance of Indian Overseas Bank and noted that as per the published result for the year ended March 31, 2021, the bank is not in breach of PCA parameters, RBI said.

Additionally, the bank has provided a written commitment to comply with minimum regulatory capital norms, net NPA, leverage ratio on an ongoing basis, RBI said.

RBI said.

Considering all the above, it has been deciding that Indian Overseas Bank is taking out of the PCA restriction subject to certain conditions and continuous monitoring,

Read More : RBI imposes two cr fine on RBL Bank

RBI had brought Indian Overseas Bank under the PCA framework in October 2015. The bank had been requesting the central bank to take it out of the PCA framework.

The bank's MD & CEO, Partha Pratim Sengupta, had said post the Q4FY21 results, "As far as all the PCA ratios are concerned, we have been achieving it in the past quarters also, barring one ratio, which is the leverage ratio.

With strike back of profits and also with the infusion of funds by the government of India, we are very comfortable in all parameters."

Indian Overseas Bank had received Rs 4,100 crore from the government.

Under the PCA norms, the central bank imposes business restrictions on banks having weak financial metrics, and the limits are deciding on a case-to-case basis.

The board reviewed the performance of the Indian Overseas Bank for Financial Supervision.

It said the bank has also provided a written undertaking that would comply with norms of Minimum Regulatory Capital, Leverage Ratio, and Net NPA on an ongoing basis.

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