Banks to come out of PCA framework by this fiscal: Secy

Asserting that the worst is behind for state-owned lenders, Financial Services Secretary Rajiv Kumar today expressed hope that the banks would come out of the Prompt Corrective Action (PCA) framework this fiscal.

As many as 11 out of 21 banks are under the RBI's watch list. Of these, two banks -- Dena Bank and Allahabad Bank -- are facing restriction on expansion of business.

Various measures taken by the government including implementation of Insolvency and Bankruptcy Code (IBC) has yielded good results in terms of reining bad loans and increasing recovery, he told reporters here.

Noting that the resurgent public sector banks are growth engines, Kumar said, "cleaning of balance sheets has put worst behind. Banks have made recovery of Rs 36,551 crore during the first quarter registering a 49 per cent growth over the last fiscal."
With all these efforts, he said, "I am sure the banks will come out of PCA this fiscal."
With regard to capital, he said, "as and when they (banks) require. Some of it has already been given. As recoveries are taking place, there is possibility that some banks will not need it. As of now there is nobody breaching the regulatory norms. We are committed to maintain their regulatory capital."