RBI takes Indian Overseas Bank out of PCA Framework

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. This means the bank will no longer face strict lending restrictions that were put in place by the RBI.

RBI said that as per the published results for the year ended March 31, 2021, IOB is not in breach of the PCA parameters.

The Reserve Bank has specified certain regulatory trigger points, as a part of the prompt corrective action (PCA) framework, in terms of 3 parameters, i.e. capital to risk-weighted assets ratio, net non-performing assets, and Return on Assets. These should be maintained by banks. Earlier this month, RBI had also removed UCO Bank from the PCA framework.