Profit Sheets

Indian Overseas Bank out of Prompt Corrective Action framework taken by RBI

September 30, 2021 12:58 PM

Indian Overseas Bank out of Prompt Corrective Action framework taken by RBI
IOB was placed under PCA in October 2015 on account of high Net-Performing Assets (NPAs) and negative Return on Assets (ROA). It was barred from increasing risk-weighted assets.

Reserve Bank of India on Wednesday has taken public sector lender Indian Overseas Bank (IOB) out of Prompt Corrective Action (PCA) framework (PCA) on improvement in financial and credit profile. This decision gives the Chennai-based lender more freedom for lending, especially to corporations and grow the network, subject to prescribed norms.

IOB was placed under PCA in October 2015 on account of high Net-Performing Assets (NPAs) and negative Return on Assets (ROA). It was barred from increasing risk-weighted assets.

As of March 2021, its net NPAs declined to 3.58 per cent from 5.68 per cent in March 2015 (FY15). It posted a net profit of RS 831 crore in FY21 as against net loss of RS 454.33 crore in FY15. The ROA was 0.27 per cent for FY21 while it was negative at -0.16 per cent for FY15.

IOB stock closed 0.74 per cent higher at RS 20.5 per share on BSE.

Also Read : Inflation is moderating faster than foreseen, proves MPC’s call right: RBI

Kolkata-based UCO Bank exited PCA framework earlier this month. Now, only Mumbai-based Central Bank of India remains under PCA regime.

RBI, in a statement, said its Board for Financial Supervision reviewed the performance of the IOB. The bank is not in the breach of the PCA parameters as per its published results for the year ended March 31, 2021, said RBI.

Under the PCA, the RBI imposes certain business restrictions on banks with weak financial metrics. The nature and degree of curbs are threshold-based and depend on the financial profile of each bank.

According to India Ratings, Indian Overseas Bank has been meeting the threshold to exit the PCA framework on a quarterly basis in the last four quarters and on an annual basis for FY21.

RBI said the bank has given commitment to comply with the norms of Minimum Regulatory Capital, Net Non-performing Assets and Leverage ratio on an ongoing basis. It has apprised about the structural and systemic improvements put in place to help the bank to meet these commitments.

Leave a comment

Your email address will not be published. Required fields are marked *

Market Live Updates


Intraday Tips
Stock Name Open Price Trend Details
Reliance 1930.10 Buy  Click Here
Asian Paints 2577.00 Buy  Click Here
HDFC 2448.00 Buy  Click Here
HDFCAMC 2790.00 Buy  Click Here
TCS 3120.00 Buy  Click Here


NSE Top Gainers/Losers
COMPANY LTP %CHNG VOLUME
UPL 711.65 1.93 39,64,616
BPCL 385.80 1.83 86,26,323
IOC 122.30 1.37 97,94,636
ONGC 145.80 1.25 1,05,64,391
LT 1,802.00 0.72 35,96,490
COMPANY LTP %CHNG VOLUME
POWERGRID 206.10 -3.92
3,55,14,487
RELIANCE
2,413.80
-2.78 87,69,773
TECHM 1,593.00 -2.25 23,81,735
ASIANPAINT
3,109.10
-2.25 12,03,061
KOTAKBANK 1,921.00 -2.20 34,64,308