Finance Ministry Expects Remaining Four Banks To Be Out Of PCA Framework This Fiscal
The finance ministry expects the remaining four public sector lenders to be out of the Reserve Bank of India’s prompt corrective action framework with the recent round of capital infusion.
The government on Friday announced capital infusion of Rs 10,800 crore into these four banks, with IOB getting the highest amount of Rs 3,800 crore.
Central Bank of India will get Rs 3,300 crore, UCO Bank Rs 2,100 crore and United Bank of India Rs 1,600 crore.
"This regulatory capital is so much that it will enable four banks to come out of PCA framework this year," Finance Secretary Rajiv Kumar told PTI.
"United Bank would come out of because of merger, while government has given enough capital to IOB, Central Bank of India and UCO Bank which will help them to come out of the PCA framework," he said.
The capital infusion helped these lenders meet requisite capital thresholds and reduced their net non-performing asset levels to below 6 percent.
Regarding the time-frame for the remaining banks to come out of the PCA framework, the Finance Secretary said the decision has to be taken by the RBI based on its assessment.
Following a host of initiatives taken by the finance ministry, the banking sector witnessed a reversal in the deteriorating bad loan situation with reduction of NPAs by 1.06 lakh crore and record loan recovery of Rs 1.21 lakh crore in the last fiscal.