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

Some market talk, some gossip – learnings over tea at RBI

A Fly on the RBI Wall: An Insider’s View of the Central Bank By Alpana Killawala Rupa Publications, 248 pages, Rs 595  

Coalition politics not expected to impact India’s foreign policy

Prime minister Narendra Modi has strived incessantly to bring laurels and much needed recognition for the nation since May 2014 when he was sworn in as the head of state. The poser which can be deliberated upon is this: What will be the consequential impact of the new era of coalition politics which confro

New govt`s first decision pushes for farmer welfare

The BJP-led NDA government has started its term with its first decision relating to farmer welfare. Narendra Modi took charge of office as prime minister of India for the third time on Monday, a day after he and his colleagues were sworn in by the president of India. In his fi

Narendra Modi takes oath for third term

Narendra Modi made history Sunday evening as he was sworn in by president Droupadi Murmu for a third successive term. Modi thus becomes the first prime minister since Jawaharlal Nehru to have comptered two full terms and beginning a third consecutive term. In the swearing-in c

Modi appointed PM for the third time

Narendra Modi was Friday appointed the prime minister for a historic third time, as president Droupadi Murmu invited him to form the next government. The swearing-in ceremony for the new council of ministers will take place on Sunday. “The President, having satisfied herself on the bas

Elections 2024: ‘Nearly half the winners have declared criminal cases’

As many as 251 of the 543 winning candidates of the just-concluded general elections, that is, 46 percent of them, have declared criminal cases against themselves, according to an analysis carried out by the Association for Democratic Reforms (ADR). This number has been consistently rising – from 162

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter