IDBI Bank spurts 17 per cent on getting out of PCA framework

The central bank of India, RBI said that IDBI Bank will be taken out of the framework of prompt corrective action (PCA) as an improvement was seen in its overall performance. 

The performance of IDBI bank was reviewed by the Board for Financial Supervision (BFS) in its meeting held on February 18, 2021. It was observed that as per the published results for the quarter ending December 2021, the bank has not breached any of the PCA parameters. These parameters include regulatory capital, net non-performing assets, and leverage ratio. 

RBI had put the bank under PCA in May 2017. When any banks are under the PCA, the central bank closely monitors weak banks, which slip below the certain financial parameters such as capital ratios, asset quality and profitability. 

The bank has given a written commitment that it will comply with norms on minimum regulatory capital, net NPA, and leverage ratio on an ongoing basis and also apprised RBI of structural & systemic improvements that it has put in place, which would help it meet these commitments. 

On Friday, the shares of IDBI bank rose as much as 17.65 per cent during the early morning hours. At the time of market close, its share price settled at Rs 42.00, which is 9.80 per cent above its previous close.

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