Central Bank of India shares jump as lender exits RBI's PCA framework after 5 years

The RBI said the Central Bank of India, which was put under the list in June 2017 because of elevated levels of bad loans and a low return on assets, is no longer in breach of PCA parameters.

The PCA framework put in place by the regulator — the RBI — restricts commercial banks from lending freely.

Central Bank of India CEO and Managing Director MV Rao, in an interaction with CNBC-TV18, exuded confidence that the lender's gross non-performing assets will come down below 10 percent this year.

"Growth guidance of 10-12 percent is already factored in... When we had given this guidance, we had factored that we will be coming out of the PCA because the measures what were taken and we know that it is only a matter of time," he said.

He also said there are no plans to monetise the assets. "We are only focusing to enhance the value in this subsidiary, and for that, the headquarters have been changed from Bhopal to Bombay... So we are not monetising, we are going to enhance the value in these," Rao added.

He also said the bank's net NPAs would stand at 3.65 percent in the third quarter and 3.43 percent in the next.

Slippages — or new bad loans — will be at one percent in Q2, he said.

Central Bank of India shares have grown by one-fifth in value in the past one month, a period in which the Nifty50 benchmark has remained flat and the Nifty Bank — which tracks the performance of shares of 12 major lenders in the country, including SBI, HDFC Bank and Kotak Mahindra Bank — gained 5.8 percent.