IDBI Bank To Meet RBI This Week Seeking Exit From PCA Framework
IDBI Bank will make a presentation to RBI on its improved financial position, sources said, adding that the management is hopeful of exiting the PCA framework by the end of January.
The central bank had placed IDBI Bank under the PCA framework in May 2017, after it had breached the thresholds for capital adequacy, asset quality (net non-performing assets were over 13 percent in March 2017), return on assets and the leverage ratio.
Since then, more than a third of the lender’s entire book turned sour in the second quarter of 2017-18, with gross NPA ratio rising to 32 percent and net NPAs at 17.30 percent.
"The presentation to the RBI will be on the key financial numbers. On the capital front and in terms of net NPAs, we have been able to make progress," the sources told Press Trust of India.
A query sent to the bank did not elicit any response.
Capital infusion by LIC and the government via recapitalisation bonds helped the bank in shoring up its capital position, another person familiar with the matter said. Recovery from stressed accounts also aided the lender’s financial position.
On Thursday, IDBI Bank shares rose 0.38 percent to Rs 35.90 apiece on the NSE while the benchmark Nifty 50 gained 0.09 percent to end the day at 12,356.25 points.