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RBI Removes 3 Banks From PCA Framework


The Reserve Bank of India has removed three banks including Allahabad Bank, Corporation Bank and Dhanlaxmi Bank from the prompt corrective action (PCA) framework that is invoked against banks with higher NPA level and insufficient capital, , subject to certain conditions and continuous monitoring. So, these banks being taken out of the framework simply means that the lending curbs against them have been lifted.

RBI Removes 3 Banks From PCA Framework

According to the RBI, "Of these banks, the Board for Financial Supervision (BFS) noted that Allahabad Bank and Corporation Bank had received Rs 6,896 crore and Rs 9,086 crore respectively. This has shored up their capital funds and also increased their loan loss provision to ensure that the PCA parameters were complied with."

"The two banks have also made the necessary disclosures to the stock exchange that post infusion of capital, the CRAR, CET1, Net NPA and Leverage Ratios are no longer in breach of the PCA thresholds. The banks also apprised RBI of the structural and systemic improvements put in place to maintain these numbers," it said.

In case of Dhanlaxmi Bank, the RBI said there has been found no breach in any of the risk thresholds as per the PCA framework and so it has been decided to remove the bank from its ambit.

So after this step, some 6 PSBs are still under the PCA framework including - IDBI Bank, UCO Bank, Central Bank of India, Indian Overseas Bank, Dena Bank and United Bank of India.

Read more about: rbi pca lending loan
Story first published: Wednesday, February 27, 2019, 9:24 [IST]
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