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RBI lifts India's IDBI Bank out of corrective action list after four years

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BENGALURU (Reuters) - The Reserve Bank of India said on Wednesday it will take IDBI Bank Ltd out of its prompt corrective action (PCA) list after it found the state-run lender was not in breach of its rules on regulatory capital, bad loans and leverage ratio.

IDBI Bank was placed under the so-called PCA framework in 2017 over its high bad loans and negative return on assets, at a time when Indian lenders battled record levels of soured assets, prompting the RBI to tighten thresholds.

The bank was no longer in breach of these PCA parameters as per its December-quarter results, the RBI said in a statement.

The RBI added IDBI has committed to complying with the central bank's norms on an ongoing basis.

IDBI Bank's gross bad loan ratio, which was among the highest in Indian banks, has eased in recent quarters, standing at 23.52% as of end-December.

Shares of IDBI Bank have lost more than 50% of their value since RBI brought it under the framework in 2017. They have surged sharply since the federal budget in February on expectations New Delhi intends to sell its stake in the bank to help India's depleted coffers.

(Reporting by Chris Thomas in Bengaluru; Editing by Krishna Chandra Eluri)