Public Sector Banks under PCA Framework Told to Submit Revival Plans Before this Week | CORPORATE ETHOS

Public Sector Banks under PCA Framework Told to Submit Revival Plans Before this Week

By: | May 22, 2018
finance_ministry

May 22: State-run banks which were put under the prompt corrective action (PCA) framework by RBI have been asked to submit the revival plans by the end of this week.  The decision comes after some of the lenders expressed apprehensions that it would take over a year for them to recover from the PCA restrictions.

The revival plans will have to be put forward by Friday to the finance ministry by 11 public sector banks on whom the RBI had imposed its PCA framework over the period of last one year. The plan is expected to include detailed guidelines including rationalisation of branches, differentiated products and services, and stringent austerity measures, which could also impose a freeze over hiring if required.

Officials have expressed hope that at least 3-4 banks will be coming out of PCA framework earlier than expected. This accounts to the reduction in non-performing assets with the freeing up of more capital. Also, financial services secretary Rajiv Kumar revealed that a reduction of Rs 35,000 crore NPA will be reflected on state-run lenders, helping specific banks to cut down their bad loan by more than Rs 10,000 crore.

Officials also indicate that there won’t be a budge from RBI despite these relaxations. Some banks feel that the PCA norms be relaxed but right now there is no such pressing need, said a report, quoting an official.

Finance Minister Piyush Goyal earlier had said that the government will be extending all its support for the banks in its recovery process. It will be ensured that the central government would give every possible support to further strengthen the resolve of these banks to come out of PCA framework as quickly as is possible, he had said while attending a meeting with the chief executives from the 11 PSBs under PCA framework.