Bank of India: Value trap despite exit from prompt corrective action list

Qualitative pick-up in loan growth essential factor in reducing costs and strengthening the balance sheet

The Nifty PSU Bank stocks index may not be enthused much by the Rs 410 billion capital infusion plan of the government. 

While the index trades in the red, down 1.6 per cent on Thursday, select public sector banks’ (PSB) stocks, namely Vijaya Bank, Central Bank, Corporation Bank and Bank of Maharashtra, traded positively. 

The latter two, along with Allahabad Bank and Bank of India (BOI), are expected to be removed from the prompt corrective action (PCA) list soon, according to media reports.

While questions are raised around how removal from the PCA framework would help these weak banks, some