Shares of Indian Overseas Bank were locked in 20 percent upper circuit at Rs 24.60 on Thursday as the Reserve Bank of India (RBI) has removed the lender from the PCA (prompt corrective action) framework.

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The removal, though, is subject to certain conditions and continuous monitoring, the central bank added.

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RBI removes Indian Overseas Bank from PCA framework

"The performance of the Indian Overseas Bank, currently under the Prompt Corrective Action Framework (PCAF) of RBI, was reviewed by the Board for Financial Supervision. 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," RBI said in a statement.

"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 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," it added.

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This means Indian Overseas Bank will no longer face strict lending restrictions that were put in place by the RBI in October 2015.

Year-To-Date, the stock has risen 129 percent , sharply outperforming the Nifty500 index that has gained only 31 percent during the same period.

The bank's stock is trading higher than its 5, 20, 50, 100 and 200-day moving averages.

Meanwhile, the delivery volume of 33.86 lakh on Wednesday had risen nearly 87 percent against the 5-day average delivery volume.

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