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RBI issues corrective framework for Public Sector Banks


RBI issues corrective framework for Public Sector Banks

New Delhi, Mar 17 (ANI): Amid the multiple scams unearthed recently in the banking sector, the Reserve Bank of India (RBI) has issued a Prompt Corrective Action (PCA) framework to maintain the sound financial health of banks. The framework facilitates banks in breach of risk thresholds for identified areas of monitoring, such as capital, asset quality (tracked in terms of the net Non-Performing Assets ratio) and profitability, to take corrective measures in a timely manner, in order to restore their financial health.

Therefore, the RBI, through this corrective framework, intends to encourage banks to abstain from certain riskier activities, improve operational efficiency and focus on conserving capital to strengthen them, as stated by Minister of State (MoS) for Finance, Shiv Pratap Shukla, in a written reply to a question in Lok Sabha on Friday. However, the minister clarified that the framework is not intended to constrain the performance of normal operations of the banks for the gen

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