Four Public Sector Banks To Come Out Of Prompt Corrective Action Restrictions Following Improved PerformanceA bank teller counts notes. (GettyImages)

Bank of Maharashtra, Corporation Bank, Allahabad Bank and Bank of India are expected to come out of the Prompt Corrective Action (PCA) restrictions following the improved performance, The Hindu has reported.

This is followed by a review of all eleven banks that are under the PCA framework. The performance of these banks was reviewed by the Reserve Bank of India (RBI) Board of Financial Supervision.

The banks have been asked to make an assessment of capital required to meet regulatory requirements. The government will pitch in with capital to help the banks to come of PCA restrictions.

Pune based Bank of Maharashtra which was under PCA turned profitable in July-September quarter. The Corporation Bank has also reported a net profit of Rs 103 crores in September quarter. However, Bank of Allahabad and Bank of India have reported losses.

RBI has set trigger points on the basis of capital-to-risk weighted assets ratio (CRAR), non-performing assets (NPA) and return on assets (ROA). Based on each trigger point, the banks have to follow a mandatory action plan. The government has been asking the RBI to relax PCA restrictions. It had become one of the reasons for the tussle between the central bank and the finance ministry.

Also Read : On PCA, Government Needn’t Lock Horns With RBI; Answers Are Mostly With Finance Ministry

An Appeal...

Dear Reader,

As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.

We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

Become A Patron
Become A Subscriber
Advertisement