The Board of Financial Supervision of RBI has reviewed the performance of the banks and noted that as per the published results for the year ended March 31, 2021, the bank is not violating the PCA norms.
The lender’s annual return on assets turned positive in FY21 for the first time since 2014. This net non-performing asset ratio (NPA) fell below the upper tolerance level of 6%.
The Bank has given a written commitment that it will adhere to the norms of minimum regulatory capital, net NPA and leverage ratio on an ongoing basis, reserve Bank of India said. The bank has also apprised the sector regulator of structural and systemic reforms that will help the bank meet these commitments.
“Keeping in view all of the above, it has been decided that Indian Overseas Bank is exempted from PCA restrictions subject to certain conditions and continuous monitoring,” RBI said.
Earlier in the month, RBI removed UCO Bank from the restrictive corrective framework.
Lenders are not allowed to lend freely, expand branches and hire employees under the PCA framework. They are also not allowed to distribute dividends.