Public sector bank Central Bank of India, which came under the Prompt Corrective Action (PCA) framework of the Reserve Bank of India (RBI), may soon get relief from restrictions after improving the financial situation.
The Central Bank of India can get rid of restrictions soon after the improvement in the financial situation.
Public sector bank Central Bank of India, which came under the Prompt Corrective Action (PCA) framework of the Reserve Bank of India (RBI), may soon get relief from restrictions after improving the financial situation. According to a PTI report, sources said that the bank has given a presentation to the RBI, in which it has been told that there has been a steady improvement in its financial parameters in the last five quarters. He said that RBI is looking into the request of the bank and may form an opinion in this regard soon.
Bank’s profit also increased
The central bank’s net profit in the first quarter of the current financial year increased by 14.2 per cent to Rs 234.78 crore, from Rs 205.58 crore in the June quarter a year ago.
The company’s gross non-performing assets (NPAs) declined to 14.9 per cent of gross advances in the quarter under review, from 15.92 per cent in the same quarter last year. Net NPAs have also come down from 5.09 per cent in June quarter last year to 3.93 per cent in this June quarter. Central Bank of India was placed under the PCA framework in June 2017 due to high net NPAs and low return on assets. Any bank is brought under the PCA if it violates select regulatory requirements.
Indian Overseas Bank and UCO Bank were removed from the PCA framework in September 2021.
Earlier, the Reserve Bank of India (RBI) had said on Friday that the support for gradual merger of public sector banks in the research paper published in the Bulletin is not its view, but it is the opinion of the authors. The research paper is published in the August issue of RBI Bulletin. It states that the gradual move towards privatization of the government can ensure that a vacuum does not arise in meeting the social objective of financial inclusion.
The article also said that the recent large scale merger of public sector banks has strengthened the sector. This has resulted in strong and competitive banks. Significantly, in 2020, the government merged 10 nationalized banks into four big banks. With this the number of public sector banks has come down to 12, from 27 in 2017.
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