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Central Bank of India out of Reserve Bank's PCA framework

Central Bank of India has given 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.

ET Now Digital

Updated Sep 20, 2022, 20:57 IST

Central Bank of India

The Reserve Bank of India on Tuesday said that Central Bank of India has been taken out of Prompt Corrective Action Framework (PCAF).

"The performance of the Central Bank of India, currently under the Prompt Corrective Action Framework (PCAF) of RBI, was reviewed by the Board for Financial Supervision. It was noted that as per the assessed figures of the bank for the year ended March 31, 2022, the bank is not in the breach of the PCA parameters," said the regulator in a statement.

"Taking all the above into consideration, it has been decided that Central Bank of India is taken out of the PCA restrictions subject to certain conditions and continuous monitoring," it added.

Indian Overseas Bank, UCO Bank and IDBI Bank came out of PCA restrictions last year.

RBI deputy governor M K Jain had said last month a request from Central Bank of India was under consideration with regard to removing PCA restrictions on the lender.

"It is not only the quantitative parameters, but it is also the qualitative parameters which we examine before taking any decision because when any bank has been taken out of the PCA, it should be on a sustainable basis," said Jain.

The PCA framework was introduced in December 2002 as a structured early intervention mechanism along the lines of the Federal Deposit Insurance Corp.’s (FDIC) PCA framework. These regulations were later revised in April 2017.

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