PCA stocks rally as FM sees more banks out of framework

NEW DELHI: Most banks under the PCA framework rallied after the Finance Minister in his budget speech said that he expected more banks to come out of PCA soon. Shares of Corporation Bank (up 0.76 per cent) Allahabad Bank (up 1.22 per cent), UCO Bank (up 1.84 per cent) Central Bank of India (up 1.61 per cent), Indian Overseas Bank (up 0.73 per cent) and United Bank of India (up 1.76 per cent) rallied upto 2 per cent in Friday's morning session. The Reserve bank of India (RBI) yesterday eased operational curbs on three state-run lenders referring to marked improvements in the capital positions and asset quality that would now allow these banks to open branches and extend loans freely. The RBI said it lifted restrictions on Bank of India (BoI) (up 0.63 per cent), Bank of Maharashtra (BoM) (up 1.10 per cent) and Oriental Bank of Commerce (OBC) (up 2.04 per cent) and these banks were out of the prompt corrective action (PCA) framework.The restrictions were lifted after these banks provided a written commitment that they would comply with the norms of minimum regulatory capital, net NPAs(Non-performing assets) and leverage ratio on an ongoing basis and apprised the RBI of the structural and systemic improvements they have put in place.

from Economic Times http://bit.ly/2Wv736i