RBI has excluded Indian Overseas Bank from the Prompt Corrective Action Framework (PCAF) list. The bank had improved its performance on various parameters. Along with this, it had given in writing that it would maintain the minimum capital standard. Only after this RBI decided to give relief to it.
RBI took the decision after reviewing the performance of the bank
RBI said in a statement that after reviewing the performance of Indian Overseas Bank, the Financial Supervision Board found that the bank has not violated the PCA parameter. The performance of the bank was reviewed on the basis of the financial results of 2020-21. The bank has given an undertaking in writing to the RBI that it will abide by the minimum regulatory capital norms. It has also pledged to comply with Net NPA and Leverage Ratio norms. It has informed the RBI about the steps it is taking to improve its structure and system. This will enable the bank to fulfill its commitments.
HDFC Bank issued four lakh new credit cards, created a record after the ban was lifted by RBI
There are many restrictions on coming in the PCAF list
RBI imposes many restrictions on the banks included in the list of PCAF Framework. Such banks are barred from taking various steps related to business including disbursing new loans, opening branches, giving dividends. Now after coming out of the list of this framework, these restrictions on Indian Overseas Bank will be removed. Recently, RBI also excluded the public sector UCO Bank from the list of PCA framework.
What is PCA Framework?
Under the Prompt Corrective Action Framework or PCA framework, weak financial aspects of a bank are monitored. This work is done under the supervision of RBI. If a bank falls below a certain threshold in terms of capital ratio, asset quality and profitability, then that bank is considered risky. After this, many restrictions are imposed on it so that the bank can improve its functioning and improve its position.
Get Business News ,, latest India News ,, and other breaking news on share market, investment scheme and much more on Business Khabar. Like us on Facebook, Follow us on Twitter for latest financial news and share market updates.
.