Reserve Bank of India has announced the removal of Prompt Corrective Action (PCA) restrictions on Indian Overseas Bank (IOB). This decision gives the bank more freedom for lending, especially to corporations and grow the network, subject to prescribed norms. IOB was placed under PCA in 2015.
- This means Indian Overseas Bank will no longer face strict lending restrictions that were put in place by the RBI in October 2015. Under PCA,
- The RBI imposes business restrictions on banks, restrictions on dividend distribution or remittance of profits, requirement on promoters to bring in more capital, restrictions on branch expansion, higher provisioning requirement, and restrictions on management compensation.
- This is done after banks financials are bellow certain parameters set by the RBI.
