The Reserve Bank of India (RBI) has pulled Indian Overseas Bank (IOB) out of the prompt corrective action (PCA) watchlist after reviewing the state-owned bank’s performance on various parameters, including non-performing assets (NPAs).

IOB, which was placed under PCA in 2015, has given a written commitment that it would comply with the norms of minimum regulatory capital, net NPA and leverage ratio on an ongoing basis.

“It was noted that as per its published results for the year ended March 31, 2021, the bank is not in breach of the PCA parameters," the RBI said. 

The lender has also apprised the RBI of the structural and systemic improvements that it has put in place, which would help the bank in continuing to meet these commitments.

“Taking all the above into consideration, it has been decided that Indian Overseas Bank is taken out of the PCA restrictions subject to certain conditions and continuous monitoring," the statement said.

Earlier this month, the central bank removed UCO Bank from PCA restrictions, including lending curbs. Now the remaining public sector lender Central Bank of India is under the PCA framework.

IOB reported a net profit of Rs 831 crore for the year ended March 31, 2021.

Indianbankingnews.com recently reported that IOB put its education loans worth Rs 400 crore up for sale to the asset reconstruction companies (ARCs) as part of its move to clean up its balance sheet.