Central Bank of India share price surges 15% after RBI removes bank from PCAF watchlist | Details

Shares of Central Bank of India jumped more than 15 per cent in early trade after the Reserve Bank of India (RBI) removed the bank from the Prompt Corrective Action Framework (PCAF) watchlist. The RBI in a press release on Tuesday said that the decision was taken keeping in view improvement in various parameters of the bank and a written commitment that the state-owned lender will comply with the minimum capital norms. 

On Wednesday, the Central Bank share price jumped 15.47% to trade on Rs 23.50 per share on the BSE.  

Central Bank of India was put under the PCA framework in June 2017 due to its high net non-performing assets (NPAs) and low Return on Assets. 

Of the three state-owned lenders under the RBI's PCA framework, Indian Overseas Bank and UCO Bank were removed from the watchlist in September 2021 

In a statement, the RBI said the performance of Central Bank of India was reviewed by the Board for Financial Supervision and it was noted that as per the assessed figures for the year ended March 31, 2022, the bank was not in breach of the PCA parameters. 
"...It has been decided that Central Bank of India is taken out of the PCA restrictions subject to certain conditions and continuous monitoring," it said. 

The lender has provided a written commitment that it would comply with the norms of Minimum Regulatory Capital, net NPA and leverage ratio on an ongoing basis, said the RBI. It has apprised the RBI of the structural and systemic improvements that it has put in place which would help the bank in continuing to meet these commitments. 

Earlier, the Central Bank of India reported a 14.2 per cent rise in net profit to Rs 234.78 crore in the first quarter ended June this fiscal as compared to Rs 205.58 crore in the same quarter a year ago.