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MUMBAI: The Reserve Bank of India (RBI) removed Allahabad Bank, Corporation Bank and Dhanlaxmi Bank out of the prompt corrective action (PCA) framework on Friday, subject to certain conditions and continuous monitoring.
“Allahabad Bank and Corporation Bank be taken out of the PCA Framework subject to certain conditions and continuous monitoring,” RBI said in a release.
“It has also been decided to take Dhanlaxmi Bank out of the PCA framework, subject to certain conditions and continuous monitoring, as the bank is found to be not breaching any of the Risk Thresholds of the PCA framework."
The central bank has specified certain regulatory trigger points as part of the PCA framework in terms of three parameters -- capital to risk weighted assets ratio (CRAR), net non-performing assets (NPA) and Return on Assets (RoA) -- for initiation of specific structured and discretionary actions.
The Board for Financial Supervision (BFS), in its meeting held on Tuesday, reviewed the performance of banks under PCA and noted that the government has infused fresh capital on February 21 into various banks, including some currently under the PCA ambit.
Of these banks, Allahabad Bank and Corporation Bank had received Rs 6,896 crore and Rs 9,086 crore, respectively, which has shored up their capital funds and increased their loan loss provision to ensure the PCA parameters were complied with, RBI said, adding that these banks had made the necessary disclosures to the stock exchanges.
Of the 21 state-owned banks, 11 were placed under PCA framework by RBI.
