The Reserve Bank of India (RBI) has removed the Central Bank of India from the prompt corrective action framework (PCAF) watchlist.

The lender has shown an improvement in various parameters and gave a written commitment to the RBI that it will comply with its minimum capital norms.

Central Bank of India was put under the PCA framework in June 2017 because of its high net non-performing assets (NPAs) and low return on assets.

Its net NPAs stood at 10.20 per cent as on March 31, 2017. The PSU lender is the last bank to exit the framework that was introduced in December 2002. They were subsequently revised in April 2017.

Under the mechanism there are three indicators covering the level of capital, asset quality and leverage.

If a bank comes under this framework, curbs such as restriction of dividend payment and branch expansion can be placed.

In a statement, the banking regulator said that the performance of Central Bank of India was reviewed by the Board for Financial Supervision and it was noted that as per the assessed figures for the year ended March 31, 2022, the bank was not in breach of the PCA parameters.

“It has been decided that Central Bank of India is taken out of the PCA restrictions subject to certain conditions and continuous monitoring.”

The lender 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.