Government seeks revival plans from 11 PSBs by Friday

Piyush GoyalThe Government has asked 11 public sector banks (PSBs) under the Reserve Bank of India’s prompt corrective action (PCA) framework to submit revival plans by Friday.

Some banks recently told the Finance Ministry that they require over one year to come out of the restrictions that the PCA has imposed on them.

PSB banks are already exploring at many stringent austerity measures, including hiring freeze.

“All banks are already looking to consolidate their operations. They will present a more detailed plan, which will incorporate rationalisation of branches, differentiated products,  services, and measures, As more cases resolve under the Bankruptcy Code, we expect more capital to free up and reduction in non-performing assets,” a daily quoted a source as saying,  adding, three to four banks may come out of the PCA framework much earlier than expected.

Meanwhile, post resolution of Bhushan Steel through the dedicated bankruptcy framework, Rajiv Kumar, Financial Services Secretary, on Monday tweeted that after the resolution of Bhushan Steel, there will be a reduction of Rs 35,000 crore of Non-performing asset (NPA)  for state-run banks.

The development is expected to give a push to Government’s drive aimed at curtailing PSB’s bad loans by more than Rs 10,000 crore.

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