The Reserve Bank of India (RBI) announced on Tuesday that it has decided to remove the state central bank of India from Immediate Corrective Action (PCA) restrictions, subject to certain conditions and continued monitoring. The bank was placed under the PCA framework in June 2017 due to its low return on assets and high net non-performing assets (NPAs).
“The performance of the Central Bank of India, currently under RBI’s Prompt Corrective Action Framework (PCAF), has been reviewed by the Board for Financial Supervision. The bank has been determined not to be in violation of the PCA parameters according to the bank’s estimated figures for the year ended March 31, 2022,” RBI said in a statement on Tuesday.
She added that the bank has provided a written commitment that it will continue to comply with the regulatory minimum capital, net NPA and leverage ratio norms and has informed the RBI of the structural and systemic improvements it has implemented of the help the Bank continue to meet these obligations.
“Taking all of the above into account, it has been decided that the Central Bank of India will be exempted from the PCA restrictions, subject to certain conditions and ongoing monitoring,” the central bank said.
PCA is triggered when banks breach certain regulatory requirements, such as B. Return on capital, minimum capital and amount of non-performing assets, including lending, management compensation and board fees.
In the first quarter ended June 2022, the Central Bank of India reported a 14.2 percent increase in net profit to Rs.234.78 crore compared to Rs.205.58 crore in the same quarter last year.
In the most recent quarter, the bank’s gross NPA fell to 14.9 percent of gross advances, compared to 15.92 percent in the same period last year. Net NPAs also fell to 3.93 percent from 5.09 percent in the first quarter of last year.
Of the three state lenders under the RBI’s PCA constraints, UCO Bank and Indian Overseas Bank were already de-framed in September 2021.
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