The Finance Ministry expects the remaining three public sector banks (PSBs) to be out of the RBI’s prompt corrective action (PCA) framework in two months, as their financial health has improved.
Indian Overseas Bank, Central Bank of India and UCO Bank are currently under this framework which puts several restrictions on them, including on lending, management compensation and directors’ fees. “These three banks are also now consistently for the last two quarters… in profit and are fulfilling, by and large, all the parameters of the RBI,” Financial Services Secretary Debasish Panda said. “We hope that before the close of this financial year (they should be out of PCA).”
He also assured additional capital for these banks, if needed. For FY21, ₹20,000 crore had been allocated as capital for PSBs. With ₹5,500 crore going to Punjab & Sind Bank, the Centre is left with ₹14,500 crore.