The 11 banks that are under PCA are: IDBI Bank, Bank of India, UCO Bank, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank, Bank of Maharashtra, United Bank of India, Corporation Bank, Allahabad Bank.
The finance ministry has convened a meeting of 11 stressed banks that are under the prompt corrective action (PCA) framework of the Reserve Bank of India on May 17, to gauge progress on their reforms agenda and seek accountability against the capital infusion into them, a senior official said on Friday. The 11 banks that are under PCA are: IDBI Bank, Bank of India, UCO Bank, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank, Bank of Maharashtra, United Bank of India, Corporation Bank, Allahabad Bank.
Together, these banks accounted for Rs 52,311 crore of the Rs 88,139-crore capital infusion plan (through bonds and budgetary support) announced by the government for 2017-18.
Another Rs 1,861 crore was already provided to public sector banks (PSBs) in the last fiscal before details of the massive recapitalisation plan was made public in January. “We will start with banks that are under the PCA and then we will have meetings with non-PCA banks on the progress on reform measures that they had committed to be eligible to get funds,” the official said. “The PCA banks will be asked to submit details of the reforms they have undertaken and by when they plan to turn the corner.” Financial services secretary Rajiv Kumar has said the reform agenda includes EASE (Enhanced Access and Service Excellence), which focuses on six themes: customer responsiveness, responsible banking, credit offtake, PSBs as Udyami Mitra, deepening financial inclusion and digitalisation and developing personnel for brand PSB.
Capital infusion this time has been tied to strict performance goals of PSBs, incorporating 30 action points on operational efficiency, portfolio diversification, smoother lending to small and medium enterprises and strict risk monitoring to avoid such a massive pile-up of bad debts in future. Finance minister Arun Jaitley has said stringent norms for disbursement of high value loans have been framed with strict surveillance on big loan defaulters and mandatory reporting of loans of over Rs 250 crore. Banks are also required to rationslise branches. In January, Jaitley had asked stressed PSBs to get their act together and get back to shape at the earliest so that they can support growth through improved lending.