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Letter to BS: Lower capital requirement would allow PSBs to lend more

It is true that any relaxation of prompt corrective action (PCA) would result in enhanced flow of credit

Business Standard 

Letter to BS: Lower capital requirement would allow PSBs to lend more

This refers to “Gurumurthy fuels a vigorous debate” (November 20). A lower capital requirement would allow public sector banks to lend more, thereby promoting growth earnings. It is true that any relaxation of prompt corrective action (PCA) would result in enhanced flow of credit but the hesitation of the RBI stems from the ever mounting non-performing assets over the years. There is a need to balance the concerns of the RBI over relaxing the PCA norms and the flow of credit to small and medium enterprises.

Sanjeev Kumar Singh, Jabalpur


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First Published: Thu, November 22 2018. 00:03 IST
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