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Dhanlaxmi Bank, Allahabad Bank, Corporation Bank rise up to 10% after removal from RBI's PCA framework

BusinessToday.In     February 27, 2019

Shares of Dhanlaxmi Bank, Allahabad Bank and Corporation Bank rose sharply by up to 10 per cent today after the RBI lifted lending curbs on these banks by removing them from its weak-bank watchlist.

Dhanlaxmi Bank zoomed 10 per cent, Allahabad Bank 7.53 per cent and Corporation Bank rose 5.82 per cent on BSE.

The RBI Tuesday removed the three banks from its prompt corrective action (PCA) framework.

In a statement, the RBI said the Board for Financial Supervision (BFS) reviewed the performance of banks under PCA and noted that the government has infused fresh capital on February 21 into various banks including some of the banks currently under the PCA framework.

Capital infusion, the RBI said, has shored up their capital funds and also increased their loan loss provision to ensure that the PCA parameters were complied with.

"Accordingly, based on the principles adopted by the BFS in its earlier meeting dated January 31, 2019, it was decided in the meeting held on February 26, 2019 that Allahabad Bank and Corporation Bank be taken out of the PCA Framework subject to certain conditions and continuous monitoring," RBI said.

The RBI further it has also been decided to take Dhanlaxmi Bank out of the PCA framework, subject to certain conditions and continuous monitoring, as the bank is found to be not breaching any of the Risk Thresholds of the PCA framework.

The Corporation Bank stock price has lost 4.55 percent over the last year but gained 15.81 percent in over 6 months. The stock gained 27.53 percent and 28.83 percent over the last two week and one week, respectively.

The opening price (Rs. 31) of the stock was above its 10,50,100, and 200 day Simple Moving Average on the exchanges.

The Dhanlaxmi Bank stock price stands around its 30 and 150 day Simple Moving Average of 15 points on BSE, NSE and crossed 150 simple moving average on NSE. The share price on both the exchanges opened with a gap up today.

The stock was traded at a volume of 3 lacs and 1.5 lacs on NSE and BSE, respectively.

The Dhanlaxmi Bank stock price movement has been negative for one year (around 32 percent down on both exchanges). However, it has gained 8.83 percent on BSE and over 9 percent one NSE over one week. The weekly MACD has turned bullish on February 18.

( Edited by Rupa Burman Roy)

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