RBI removes BoI, BoM, OBC from Prompt Corrective Action framework

RBI said that both BoI and BoM have Net NPAs of less than 6% as per Q3 results while OBC's net NPA has come down as the govt has infused sufficient capital

The Reserve Bank of India (RBI) Thursday removed three state-owned banks from its weak-bank watch list, a move that will lift lending restrictions on them.

"It has been decided that Bank of India (BoI) and Bank of Maharashtra (BoM) which meet the regulatory norms including Capital Conservation Buffer (CCB) and have Net NPAs (non-performing assets) of less than 6 per cent as per third quarter results, are taken out of the PCA (prompt corrective action) framework subject to certain conditions and continuous monitoring," the RBI said in a statement.

In case of Oriental Bank of Commerce, the net NPA has come down to less than 6 per cent as the government has infused sufficient capital, it said.

Hence, it has been decided to remove the restrictions placed on Oriental Bank of Commerce (OBC) under PCA framework, subject to certain conditions and close monitoring, the apex bank added.

Commeting on the RBI's decision, Financial Services Secretary Rajiv Kumar said: "Government's sustained 4R's strategy for banking transformation delivers again. 3 better-performing PSBs (BoM, BoI & OBC) exit PCA. Banks need to be more responsible, adopt high underwriting & risk management standards to avoid recurrence.