Lending Restrictions Lift from Three Public Sector Banks by RBI
The Reserve Bank of India (RBI) has removed Bank of Maharashtra, Bank of India and Oriental Bank of Commerce from its PCA (Prompt Corrective Action) framework – it is a watch list for weak banks which place lending restrictions on them.
These three banks had a capital infusion of Rs 4,498 crore which helped these bank to improve their capital adequacy ration to 11.05% and reduced its non-performing assets (NPAs) by 50% year-on-year. The governor Shaktikanta Das chaired the board meeting where he reviewed the performance of all the 11 banks on the PCA list. And then the decision was taken on Thursday.
“To stay away from the PCA list, the bank has to be more responsible, adopt high underwriting and risk management standards to avoid this recurrence,” tweeted by Rajeev Kumar, finance secretary of RBI.
RBI decision came two days after the bank review meeting with the interim finance minister Piyush Goyal; he informed the banks that if they maintained the improvement in their performance than they would exit the PCA soon.