Will try to lift more banks from PCA

2 min read

1.The government said they will try to help lift the restrictions on other public sector banks too after the Reserve Bank of India (RBI) lifted restrictions under prompt corrective action (PCA) on three public sector banks last week.

2.The PCA framework kicks in when banks breach any of the three key regulatory trigger points — namely capital to risk weighted assets ratio, net non-performing assets (NPA) and return on assets (RoA).

3.Reserve Bank of India lifted lending curbs on three out of 11 weak public sector banks (PSBs) as the net Non performing assets has come down to less than 6 percent as the government has infused sufficient capital into them.

3.The PCA framework was one of the contentious issue between the government and the RBI. The government wanted the central bank to align the PCA framework to the global norms.Globally,PCA kicks in only when banks slip on a single parameter of capital adequacy ratio.

4.Finance minister also said that the government is all set to provide electricity connection to every willing household under the Saubhagya scheme by the end of March 2019.

5.He also said that development finance institutions(DFI’s) are “pressing need of the hour” and that many industries who have come up today have taken long term loans from the institutions like ICICI,IDBI and IFCI.