Indian Overseas Bank freed from PCA restrictions by RBI

|MINT|

State-owned Indian Overseas Bank (IOB) will no longer be subject to strict lending curbs imposed by the Reserve Bank of India (RBI) in October 2015, as the central bank said on Wednesday that the lender has been taken out of the prompt corrective action (PCA) restrictions.

Following its exit, only Central Bank of India remains under PCA. RBI uses PCA framework to rein in banks that have breached certain regulatory thresholds in bad loans and capital adequacy. PCA entails curbs on high-risk lending, setting aside more money on provisions and restrictions on management salary.

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