RBI takes Indian Overseas Bank out of Prompt Corrective Action framework

IOB was placed under PCA in October 2015 on account of high net-performing assets and negative Return on Assets (RoA).

Reserve Bank of India on Wednesday has taken public sector lender Indian Overseas Bank (IOB) out of Prompt Corrective Action (PCA) framework (PCA) on improvement in financial and credit profile. This decision gives the Chennai-based lender more freedom for lending, especially to corporations and grow the network, subject to prescribed norms.

IOB was placed under PCA in October 2015 on account of high Net-Performing Assets (NPAs) and negative Return on Assets (RoA). It was barred from increasing risk-weighted assets.

As of March 2021, its net NPAs declined to 3.58 per cent from 5.68 per cent in March 2015 (FY15). It