Indian Overseas Bank (IOB) jumped 12.93% to Rs 23.15 after the Reserve Bank decided to remove the public sector bank from prompt corrective action (PCA) framework, subject to certain conditions and continuous monitoring.
On the BSE, 129.14 lakh shares were traded in the counter so far compared with average daily volumes of 18.97 lakh shares in the past two weeks. The stock hit a high of Rs 24.6 and a low of Rs 22.5 so far during the day.
The Central Bank noted that IOB is no longer in breach of PCA triggers based on its published results for the year ended 31 March 2021.
The government-backed lender has provided a written commitment to the RBI that it would comply with the norms of minimum regulatory capital, net NPA and leverage ratio on an ongoing basis and has apprised the RBI of the structural and systemic improvements that it has put in place which would help the bank in continuing to meet these commitments.
"Taking all the above into consideration, it has been decided that Indian Overseas Bank is taken out of the PCA restrictions subject to certain conditions and continuous monitoring," the RBI said in a statement.
IOB, established in 1937, is the 10th-largest public sector bank in India. The Government of India is the single-largest shareholder of the bank with 95.8% ownership. As of Q1 FY22, IOB had a network of 3,217 branches within India, four overseas offices across Singapore, Hong Kong, Colombo and Bangkok, and 3,163 ATMs and cash recyclers.
The bank's net profit surged to Rs 326.64 crore in Q1 FY22 from Rs 120.69 crore in Q1 FY21. Total income fell 1.5% YoY to Rs 5,155.03 crore during the period under review.
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