Prompt Corrective Action

'It has been in the range of 20-30 per cent in almost every quarter'

Rao says he doesn't foresee much flight of CASA money into term deposits as deposit rates are hiked

Central Bank of India, the only public sector lender under the RBI's prompt corrective action (PCA) framework, may see an exit from restrictions soon following an improvement in its financial health. The bank has already made a representation to the Reserve Bank of India (RBI) based on the improvement in financial parameters on a sustained basis for the past five quarters, sources said. According to sources, the RBI is looking at the bank's request and may take a view on this soon based on quantitative and qualitative parameters. Central Bank of India reported a 14.2 per cent rise in net profit to Rs 234.78 crore in the first quarter ended June this fiscal as compared to Rs 205.58 crore in the same quarter a year ago. In the latest quarter, the bank's gross NPA fell to 14.9 per cent of the gross advances as compared to 15.92 per cent in the year-ago period. Net NPAs too declined to 3.93 per cent from 5.09 per cent in the first quarter of the previous year. Of the three PSU lenders

The number of branches stood at 4,528 at the end of December 2021

Bad loans in some NBFCs will definitely rise but no one should complain. They are no longer shadow banks

State-owned lender may also get capital infusion before the govt sets up privatisation.

According to RBI data for January 2021, while there were 9,507 NBFCs, only 64 were deposit-taking (NBFC-D)

Three different risk thresholds, three different yardsticks to measure PCA risk thresholds. The curns against the NBFC get progressively tightened as they breach higher threshold levels

New regulations for stressed NBFCs harmonise with those for banks

There are about 10,000 NBFCs registered with the RBI, but only a few that can potentially face these PCA restrictions

PCA will be activated for large NBFCs once their capital adequacy falls by 300 bps, or net NPA ratio rises above 6%

The PCA framework for NBFCs shall come into effect from October 1, 2022, based on the financial position of NBFCs on or after March 31, 2022

Capital, asset quality and leverage will be the key areas for monitoring in the revised framework, the RBI said

RBI removed the public sector bank from the PCA framework after six years citing improvement in the bank's financial health

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

IOB is not in breach of PCA parameters as per its March quarter earnings, says RBI

Central Bank in its annual report for 2020-21 said it was complying with the PCA framework norms meticulously

The Kolkata-based lender was placed under PCA in May 2017 on account of high net NPAs and negative RoA

National Asset Reconstruction Company Ltd's paid-up capital is Rs 74.6 crore

Indian Overseas Bank, Central Bank of India and UCO Bank are currently under this framework that puts several restrictions on them, including on lending, management compensation and directors' fees