RBI removes PSBs Allahabad Bank, Corporation Bank and Dhanlakshmi Bank from PCA framework

RBIThe Reserve Bank of India (RBI) has removed public sector lenders Allahabad Bank, Corporation Bank and Dhanlaxmi Bank out of the prompt corrective action (PCA) framework, said the Central Bank in its official communiqué.

However, this exclusion is subject to certain conditions and continuous monitoring.

“Allahabad Bank and Corporation Bank be taken out of the PCA Framework subject to certain conditions and continuous monitoring,” RBI said in a release. “It has also been decided to take Dhanlaxmi Bank out of the PCA framework, subject to certain conditions and continuous monitoring, as the bank is found to be not breaching any of the Risk Thresholds of the PCA framework,” said the RBI.

The apex body specified certain regulatory norms as a part of the PCA framework in terms of three parameters namely capital to risk weighted assets ratio (CRAR), net non-performing assets (NPA) and Return on Assets (RoA), in a bid to initiate specific structured and flexible actions.

In its recent review meeting, the Board for Financial Supervision (BFS) appraised the performance of banks under PCA and even noted the Centre’s infusing of fresh capital on February 21 into various banks. This includes certain Public Sector Banks (PSBs) under the PCA ambit.

Out of the included banks, Allahabad Bank and Corporation Bank received Rs 6,896 crore and Rs 9,086 crore, respectively, RBI said.

India in total has 21 PSBs out of which 11 were placed under PCA framework by RBI.

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