Public Sector Banks not being shut: RBI

Prompt Corrective Action (PCA) framework is not intended to constrain normal operations of the banks for the general public, said RBI

GN Bureau | December 22, 2017


#RBI   #Reserve Bank of India   #PSB  


The Reserve Bank of India (RBI) on Friday scotched rumours and said that Public Sector Banks are not being shut down.

“The RBI has come across some misinformed communication circulating in some section of media including social media, about closure of some Public Sector Banks in the wake of their being placed under the Prompt Corrective Action (PCA) framework,” said a statement.

Citing a June 5, 2017 press release, it said: “The Reserve Bank has clarified that the PCA framework is not intended to constrain normal operations of the banks for the general public.

“It is further clarified that the Reserve Bank, under its supervisory framework, uses various measures/tools to maintain sound financial health of banks. PCA framework is one of such supervisory tools, which involves monitoring of certain performance indicators of the banks as an early warning exercise and is initiated once such thresholds as relating to capital, asset quality etc. are breached.

“Its objective is to facilitate the banks to take corrective measures including those prescribed by the Reserve Bank, in a timely manner, in order to restore their financial health. The framework also provides an opportunity to the Reserve Bank to pay focussed attention on such banks by engaging with the management more closely in those areas. The PCA framework is, thus, intended to encourage banks to eschew certain riskier activities and focus on conserving capital so that their balance sheets can become stronger.”

It added that the PCA framework has been in operation since December 2002 and the guidelines issued on April 13, 2017 is only a revised version of the earlier framework.

Comments

 

Other News

Freedom of press in India is a myth: Tewari

Sections of the news media have degenerated into becoming the pet performing poodle of the government, says Manish Tewari, former information and broadcasting minister and a member of the Lok Sabha. In a webinar chat with Kailashnath Adhikari, MD, Governance Now, on Friday as part of the Vis

In free fall: Close to 1 lakh Covid-19 cases a day

India has been hitting upwards of 90,000 fresh cases of Covid-19 every day for some time now, as the virus continues to spread amid further Unlock. The recoveries, on the other hand, are also creating new records. The country recorded 96,424 new cases of infection – the highest single-

India has new record of recoveries – but new cases remain high too

India once again registered 90,000-plus fresh cases of Covid-19 in a day, even as the number of recoveries too registered a new high – 82,961. The number of those who have recovered so far is now nearly four times higher than the number of active cases. India continues to record a spat

“In financial sector, governance is the key”

The fall of financial institutions is largely a result of governance failures and company board members must ensure checks and balances for the larger ecosystem, says entrepreneur Shachindra Nath, executive chairman and managing director, U GRO Capital. In an webinar chat with Kailashnath Ad

More discussion in parliament beneficial for country: PM

As parliament on Monday commenced its special session amid the raging Covid-19 pandemic, prime minister Narendra Modi underlined the importance of debate in the house, saying that it is “beneficial” for the country. “Several important decisions will be taken in this session

`My Family, My Responsibility`: Mumbai campaign to spread Covid awareness

As coronavirus refuses to abate, Maharashtra has become the first state in India to cross 1 million mark in terms of confirmed cases and stares at shortage of medical oxygen. Every day 2,000-3,000 new patients require oxygen support across the state. Those in a critical condition need 40-60 litres of oxyge

Governance Now Tech Masterclass State Governments

Archives

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter