Allahabad Bank, Corporation Bank, and Dhanlakshmi Bank removed from PCA Framework by RBI

The Reserve Bank of India(RBI) removed Allahabad Bank, Dhanlakshmi Bank, and Corporation Bank out of the Prompt Corrective Action(PCA) framework, subject to certain conditions and continuous monitoring of the banks.

According to the RBI statement, the Corporation Bank and Allahabad Bank have been taken out of the PCA framework subject to certain conditions and continuous monitoring of the banks. The RBI decided to take Dhanlakshmi Bank out of the PCA framework after certain conditions and constant monitoring as the bank is found to be not breaching any of the Risk Thresholds of the PCA framework.

The RBI has specified certain regulatory trigger points as the part of their PCA framework in terms of three parameters – non-performing assets (NPA), capital to risk-weighted assets ratio (CRAR), and the return of assets (RoA) – for the initiation of specific structured and discretionary actions.

In the meeting of The Board for Financial Supervision (BFS) on Tuesday, they reviewed the performance of the banks under PCA and noted that the government had infused some fresh capital to various capitals which include those bank which is currently under the PCA ambit. Out of which Allahabad Bank and Corporation Bank have received capital of Rs 6,896 crore and Rs 9,086 crore respectively because of which capital funds shored up, and their loan loss provision increased ensuring the PCA parameters.