Allahabad, Corporation and Dhanalaxmi Banks spike up

The Reserve Bank of India has moved these bank out of the restrictive PCA framework. Reacting to this development, the stocks of these banks surged up from 6 to 9 per cent on Wednesday.

The Prompt Corrective Action (PCA) Framework imposed on these bank by RBI was lifted on Tuesday. The banks were relieved as they did not breach any Risk Thresholds prescribed under PCA. They will, however, be subject to stipulated conditions under the Monitorable Action Plan (MAP). The major limitations put by PCA include no expansion of branches, no dividend and restriction on directors compensation.

Reacting to this development, the banks were trading in the green since early trade on Wednesday. The stock of Allahabad Bank was at Rs. 46.90 per share, up by 6.96 per cent. The bank announced a downward revision of its existing Marginal Cost of Funds Based Lending Rates (MCLRs) by 10 basis points across all tenors. 

At 15:04 hours, the stock of Corporation Bank was at Rs. 31 per share, up by 6.16 per cent, while Dhanlaxmi Bank Limited was at Rs. 15.30 per share, up by 9.29 per cent on BSE.