Corporation Bank, Dhanlaxmi, Allahabad Bank gain over 5% on PCA exit

Shares of Corporation Bank, Dhanlaxmi Bank and Allahabad Bank rallied up to 10 per cent on the National Stock Exchange (NSE) in early morning trade on exit from the prompt corrective action (PCA) framework.

The Reserve Bank of India (RBI) on Tuesday removed these three banks from PCA framework allowing them to lend freely in line with the government’s objective to empower lenders so that they support economic growth.

Following the news, Corporation Bank rallied 10 per cent to Rs 32.40, Dhanlaxmi Bank, too, surged 10 per cent to Rs 15.30 and Allahabad Bank gained 6 per cent to Rs 46.65 on the NSE.

Earlier this month, RBI had taken out three public sector banks -- Bank of India, Bank of Maharashtra, and Oriental Bank of Commerce -- out of the framework.

Mumbai-based IDBI Bank, Central Bank of India, Dena Bank, Chennai-based Indian Overseas Bank and two Kolkata-based lenders -- United Bank of India and UCO Bank -- are still under the PCA framework.

Meanwhile, at 09:39 am, Nifty PSU Bank index, the largest gainer among sectoral indices, was up 1.4 per cent at 2,769 levels. In comparison, the benchmark Nifty 50 index was up 0.69 per cent, while Nifty Bank and Nifty Private Bank were up 0.90 per cent each.

Nifty PSU Bank index has underperformed the market by falling 10 per cent in February, as compared to 0.04 gain in the Nifty 50 index till Tuesday.