Six more state-run banks, including Punjab National Bank, Union Bank of India and Syndicate Bank, are at risk of entering the Reserve Bank of India’s (RBI) prompt corrective action (PCA) framework, reported The Economic Times.
This will bring number of banks under PCA framework to 17, the report said.
The RBI action may reduce the chances of the finance ministry’s plans to sell the good loans of weak banks to stronger lenders coming to fruition, added the report.
The banking regulator may give some relief given these lenders are not falling behind on all indicators, said the report quoting a senior finance ministry official, adding that they don’t come under PCA, there is a chance the plan to sell healthy loans may work.
PCA involves imposition of various curbs such as stopping branch expansion, halting dividend payments, limiting loan limits, audits and restructuring if warranted.
Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra are the 11 state-owned banks that currently under PCA.
First Published: IST