RBI monitoring four banks’ efforts under PCA scheme

February 23, 2020 7:50 AM

Last year, the RBI removed five banks — Bank of India, Bank of Maharashtra, Oriental Bank of Commerce, Allahabad Bank and Corporation Bank — from the PCA framework in two phases.

Reserve Bank of India news, RBI latest news, RBI governor Shaktikanta Das, Prompt Corrective Action (PCA), PCA framework, Indian Overseas Bank (IOB) latest news, Central Bank of India latest news, UCO Bank latest news, United Bank of India latest newsRecently, the government announced capital infusion of Rs 11,521 crore into these four banks

By Kumar Dipankar and Ammar Zaidi

The Reserve Bank of India Governor Shaktikanta Das has said four banks under the Prompt Corrective Action (PCA) framework are taking efforts and they are being monitored.

Currently, Indian Overseas Bank (IOB), Central Bank of India, UCO Bank and United Bank of India are under this framework, which puts several restrictions on them, including on lending, management compensation and
directors’ fees.

“We would like them to improve their performance and come out of PCA as quickly as possible. We are engaged with the banks. We are monitoring it. They are taking efforts. Banks are required to take several actions to come out of the
PCA, and that is being monitored,” Das told PTI in an interview.

Recently, the government announced capital infusion of Rs 11,521 crore into these four banks, with IOB getting the highest amount of Rs 4,360 crore. Central Bank of India got `3,353 crore, UCO Bank Rs 2,142 crore and United Bank
of India Rs 1,666 crore.

Besides, LIC-controlled IDBI Bank, too, received additional capital of Rs 4,557 crore through the first supplementary
demands for grants approved by Parliament in December. Last year, the RBI removed five banks — Bank of India, Bank of Maharashtra, Oriental Bank of Commerce, Allahabad Bank and Corporation Bank — from the PCA framework in two phases after capital support from the government that resulted in improvement in their financial
parameters.

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