Central Bank Gains Close To 6% As PCA Restrictions On The PSB May Soon Be Lifted

Shares of Central Bank of India gained in early trade on August 22, 2022 to day's high price of Rs. 18.95, rallying close to 6% from the previous trading session's close of Rs. 17.9 apiece on the NSE.

The sharp gains in the PSB stock are triggered on news flow that the PCA or prompt corrective action related restrictions on the bank may soon be lifted. Interestingly, Central Bank is the only public sector bank currently placed under the prompt corrective action framework. As per the RBI, the objective of the PCA Framework is to enable Supervisory intervention at appropriate time and require the Supervised Entity to initiate and implement remedial measures in a timely manner, so as to restore its financial health. The PCA Framework is also intended to act as a tool for effective market discipline.

The bank in light of its improved financials on a consistent basis for the last 5 quarters has already approached the RBI for the same. In the Q1 period of Fy23, the bank posted 14.2% rise in net profit to Rs. 234.78 crore. GNPA
fell to 14.9% vs 15.92% in Q1FY22 while NNPA declined to 3.93% from 5.09% in Q1FY22, signifying improvement in asset quality year on year.

Central Bank of India is a nationalised bank based out of Mumbai. The Bank's segments include Treasury Operations, Corporate/Wholesale Banking, Retail Banking and other Banking business.

Last the scrip at around 9:39 am traded at Rs. 18.55, up over 3% on the NSE.