Indian Overseas Bank shares hit 20% upper circuit on being removed from RBI’s PCA framework

Indian Overseas Bank share price: The Indian Overseas Bank (IOB) scrip jumped 20 per cent to Rs 24.60 per share on the BSE, while on the National Stock Exchange (NSE), it surged 19.80 per cent to Rs 24.50.

Shares of Indian Overseas Bank (IOB) hit a 20 per cent upper circuit in the early trade on Thursday a day after the Reserve Bank of India (RBI) removed the public sector lender from its PCA (prompt corrective action) framework.

The scrip jumped 20 per cent to Rs 24.60 per share on the BSE, while on the National Stock Exchange (NSE), it surged 19.80 per cent to Rs 24.50.

However the stock eased from its day’s highs and at 10:33 am, it was trading at Rs 23.10 apiece, up 12.68 per cent on the BSE and at Rs 23.10, up 12.96 per cent on the NSE.

Over 5.21 crore shares were traded on the NSE while over 1.29 shares exchanged hands on the BSE, data from the respective stock exchanges showed.

The lender was placed under the PCA framework in 2015.

“The performance of the Indian Overseas Bank, currently under the Prompt Corrective Action Framework (PCAF) of RBI, was reviewed by the Board for Financial Supervision. It was noted that as per its published results for the year ended March 31, 2021, the bank is not in the breach of the PCA parameters. The bank 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 and 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,” the RBI said in a statement after market hours on Wednesday.

Taking all the above into consideration, it has been decided that Indian Overseas Bank is taken out of the PCA restrictions subject to certain conditions and continuous monitoring, the central bank said.

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