IDBI Bank Ltd.: IDBI Bank shares close nearly 10% higher after removal from RBI’s PCA framework

NEW DELHI: Shares of IDBI Bank on Friday closed with nearly 10 per cent gain after RBI removed the lender from its enhanced regulatory supervision or Prompt Corrective Action (PCA) framework after a gap of nearly four years. The stock started on a positive note, and jumped 17.12 per cent to Rs 44.80 on BSE during the day. It finally closed at Rs 42, a gain of 9.80 per cent.

On NSE, it closed at Rs 42, climbing 9.80 per cent after rallying 17.64 per cent to Rs 45 during the day.

In volume terms, 115.74 lakh shares were traded on BSE and over 12 crore on NSE.

The Reserve Bank of India (RBI) had placed IDBI Bank under PCA framework in May 2017, after it had breached the thresholds for capital adequacy, asset quality (net NPAs was over 13 per cent in March 2017), return on assets and the leverage ratio.

The performance of IDBI Bank was reviewed by the Board for Financial Supervision (BFS) in its meeting held on February 18, 2021.

It was noted that as per published results for the quarter ending December 31, 2020, the bank is not in breach of the PCA parameters on regulatory capital, net NPA and leverage ratio, RBI had said on Wednesday.

The bank has also provided a written commitment that it would comply with the norms of minimum regulatory capital, net NPA and leverage ratio on an ongoing basis and has 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.

Equity markets were closed on Thursday for Mahashivratri.