Shares of PCA banks surge on talks to ease lending norms

Shares of some public sector banks under Prompt Corrective Action (PCA) regime surged on the back of the move to relax norms for such banks. The stock of Pune-based Bank of Maharashtra (MahaBank) closed 8.8 per cent higher at Rs 14.7 per share, while that of Bank of India was up 6.6 per cent at Rs 97 per share. 

Kolkata-based Allahabad Bank’s stock rose 4.2 per cent to Rs 48 and Mangaluru-based Corporation Bank closed 4.7 per cent higher at Rs 29.2 per share, according to BSE.  

A government official said rules that curb unprofitable banks from lending may be eased. Lenders including Allahabad Bank and Bank of India are likely to exit from the RBI-administered PCA, under which they are restricted from expanding business.

The issue of reviewing the PCA framework came up in the meeting RBI governor Shaktikanta Das had with chiefs of PSBs based outside Mumbai.