No question of closing down any bank, says DFS Secretary

There is no question of closing down any bank, rather the government is looking to strengthen the Public Sector Banks (PSB), Rajeev Kumar, Secretary Department of Financial Services (DFS), Ministry of Finance said on Friday.

Kumar gave the clarification on the misinformation being spread in a certain section of media, including social media, about the closure of some Public Sector Banks in the wake of them being placed under the Prompt Corrective Action (PCA) framework.

"Do not believe rumour mongers. Recap, Reforms roadmap for Public Sector Banks firmly on track," Kumar said in a tweet, emphasising that the government is strengthening PSBs by the 2.11 lakh Crore recapitalisation plan.

The Reserve Bank of India (RBI) also said that placing the banks under the Prompt Corrective Action framework is not intended to constrain the normal operations of the banks for the general public.

"The PCA framework is, thus, intended to encourage banks to eschew certain riskier activities and focus on conserving capital so that their balance sheets can become stronger," RBI stated emphasizing that PCA framework is a supervisory tool whose objective is to facilitate the banks to take corrective measures including those prescribed by RBI in a timely manner.