The Allahabad Bank, Corporation Bank and Dhanlaxmi Bank Ltd has been removed from the Reserve Bank of India (RBI) Prompt Corrective Action framework. The Board for Financial Supervision, which met on Tuesday, decided to put the public sector banks out of the framework.
According to the central bank, “the Government of India has infused fresh capital on February 21, 2019 into various banks…currently under the PCA framework. Of these banks…Allahabad Bank and Corporation Bank had received Rs. 6896 crore and Rs. 9086 crores respectively. This has shored up their capital funds and also increased their loan loss provision to ensure that the PCA parameters were complied with.”
The reserve bank also added, “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.”
Since January, six banks (including five state-runned banks) have been removed from the prompt corrective action framework by the reserve bank. More than half of state-controlled lenders were held under the PCA framework, which was intended to strengthen weak banks, since April 2017.