Business Standard

Prompt corrective action or slow destruction?

Let's nurse the weak banks back to health while teaching them not to make the same mistakes

Banks, NPA, IBC

Illustration by Binay Sinha

Tamal Bandyopadhyay
The Reserve Bank of India’s (RBI) last board meeting in Mumbai continued for hours, the longest in its recent history. Much time was spent discussing the so-called prompt corrective action (PCA) being imposed on 11 public sector banks (PSBs) and the liquidity crunch for non-banking finance companies. 
This is not that first time that PCA is in the limelight. An August report of the parliamentary standing committee on finance had pointed out that the PCA framework may end up bringing more PSBs under its ambit “which may aggravate matters and culminate in a vicious cycle in the banking sector and
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of or the Business Standard newspaper

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First Published: Oct 28 2018 | 11:24 PM IST

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