Shares of Central Bank of India zoomed 15 per cent today after the Reserve Bank of India RBI removed the lender from the list of Prompt corrective action (PCA) restrictions. The performance of the bank was reviewed by the Board for Financial Supervision. Buoyed by the development, shares of Central Bank gained 15.48 per cent to Rs 23.5 against the previous close of Rs 20.35 on BSE.
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Central Bank shares opened with a gain of 15.48 per cent today. Shares of Central Bank have gained 1.87 per cent in the last one year and risen 2.59 per cent since the beginning of this year. The stock has climbed 21.79 per cent in a month. In a week, the stock is up 3.32 per cent. The banking stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. Total 55.26 lakh shares of the firm changed hands amounting to a turnover of Rs 12.28 crore on BSE. Market cap of the bank rose to Rs 18,294 crore.
ALSO READ: RBI takes Central Bank of India out of PCA restrictions
The bank has provided a written commitment that it would comply with the norms of Minimum Regulatory Capital, Net NPA and Leverage ratio on an ongoing basis. It 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.
The RBI took into account the performance along with the written commitment of the bank and decided to take the lender out of the PCA restrictions subject to certain conditions and continuous monitoring.
RBI imposes PCA on those banks which breach certain regulatory requirements such as return on asset, minimum capital, and quantum of non-performing assets. Banks under PCA face restrictions such as dividend distribution, branch expansion, and management compensation or may require promoters to infuse capital in the bank.
Central Bank reported a 14.2 per cent rise in profit to Rs 234.78 crore in Q1 against Rs 205.58 crore recorded in the corresponding period of last year. The gross non-performing assets (NPAs) fell from 15.92 per cent to 14.9 percent in the latest quarter.