31-Jan-2019: RBI removes BoI, BoM ,OBC from PCA framework

The Reserve Bank of India (RBI) removed three state-owned banks from its weak-bank watch list, a move that will lift lending restrictions on them. It has been decided that Bank of India (BoI) and Bank of Maharashtra (BoM) which meet the regulatory norms including Capital Conservation Buffer (CCB) and have Net NPAs (non-performing assets) of less than 6 per cent as per third quarter results, are taken out of the PCA (prompt corrective action) framework subject to certain conditions and continuous monitoring.

In case of Oriental Bank of Commerce, the net NPA has come down to less than 6 per cent as the government has infused sufficient capital. Hence, it has been decided to remove the restrictions placed on Oriental Bank of Commerce (OBC) under PCA framework, subject to certain conditions and close monitoring.

Government’s sustained 4R’s strategy for banking transformation delivers again. 3 better-performing PSBs (BoM, BoI & OBC) exit PCA. Banks need to be more responsible, adopt high underwriting & risk management standards to avoid recurrence.

28-Jan-2018: Performance review of heads of public sector banks

The Finance Ministry is planning to initiate a performance review of heads of public sector banks that are under the RBI’s Prompt Corrective Action (PCA) as part of the reform process.

So far, the Reserve Bank has put 12 public sector banks under watch in view of poor performance on parameters such as high levels of non-performing assets (NPAs), low capital level and low return on assets. These parameters indicate the financial health of banks and a need to initiate remedial measures to put them on the right course.