Exit from prompt corrective action not enough to boost BoI, OBC, BoM stocks

BoI and BoM managed to reduce their net NPA ratios from seven -10 per cent a quarter ago to less than six per cent in Q3, while that of OBC's fell from 10.1 per cent to 7.2 per cent during the period

Despite Bank of India (BoI), Oriental Bank of Commerce (OBC) and Bank of Maharashtra (BoM) making an exit from the Prompt Corrective Action (PCA) framework imposed by the central bank about a year ago, markets didn’t seemed thrilled. The stocks extended Friday’s losses. While OBC took a milder hit of less- than-a-per cent fall on Monday, BoI and BoM fell 1.5 per cent and 5 per cent, respectively. 

The reason being, even after exclusion from PCA, the Street remained sceptical about the banks’ near-to medium-term prospects. G Chokkalingam, MD, Equinomics Research and Advisory said, in the current form, their financials were