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Shares of UCO Bank surged over 10 per cent on Thursday afternoon as the Reserve Bank of India (RBI) decided to bring it out of the Prompt Corrective Action (PCA) framework and lifted the restrictions.

Around 12.40 p.m., its shares on the BSE were trading at Rs 14.17 per share, higher by 10.62 per cent from its previous close.

Earlier it touched an intraday high of Rs 14.85 per share.

On Wednesday, RBI said that it has taken UCO Bank out from the PCA framework and lifted the restrictions. It, however, said that the decision is subject to certain conditions and continuous monitoring.

The central bank said that the performance of UCO Bank was reviewed by the Board for Financial Supervision and 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.

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.

"Taking all the above into consideration, it has been decided that UCO Bank is taken out of the PCA restrictions subject to certain conditions and continuous monitoring," the RBI statement said.

The Indian Overseas Bank and the Central Bank of India are the other two banks under the framework.

The Reserve Bank has specified certain regulatory trigger points, as a part of PCA framework, in terms of three parameters including capital to risk weighted assets ratio (CRAR), net non-performing assets (NPA), and return on assets (RoA), for initiation of certain structured and discretionary actions in respect of banks hitting such trigger points.

The PCA framework is applicable only to commercial banks.