The Ministry of Finance expects the remaining four banks to be outside the PCA framework this fiscal year

New Delhi, September 2 () The Ministry of Finance expects the remaining four public sector lenders to be outside the RBI's corrective action framework (PCA) with the recent round of capital infusion.

Currently, the Overseas Indian Bank (IOB), the Central Bank of India, the UCO Bank and the United Bank of India are under this framework that imposes various restrictions, including loans, management compensation and fees. The directors.

The government announced on Friday the infusion of Rs 10,800 million rupees in these four banks, with IOB obtaining the highest amount of Rs 3,800 crore.

The Central Bank of India will obtain Rs 3,300 crore, UCO Bank Rs 2,100 crore and United Bank of India Rs 1,600 crore.

This regulatory capital is so much that it will allow four banks to leave the PCA framework this year, said Finance Secretary Rajiv Kumar.

United Bank would come out of the merger, while the government has given enough capital to IOB, Central Bank of India and UCO Bank, which will help them out of the PCA framework, he said.

Last week, the government announced the consolidation of 10 public sector banks (PSB) into four mega state lenders, including the merger of Oriental Bank of Commerce and United Bank of India with Punjab National Bank.

Earlier this year, RBI eliminated five banks (Bank of India, Bank of Maharashtra, Oriental Bank of Commerce, Allahabad Bank and Corporation Bank) from the PCA framework in two phases after government capital support that resulted in an improvement in your finance parameters

The infusion of capital helped these lenders reach the required capital thresholds and reduced their net NPA levels to less than 6 percent.

Of the 11 banks submitted to the PCA framework last year, Dena Bank ceased to exist as a separate entity after its merger with Bank of Baroda in April, while IDBI Bank was acquired by LIC.

Regarding the deadline for the remaining banks to leave the PCA framework, the Secretary of Finance said that the decision should be taken by the RBI based on its evaluation. After a series of initiatives taken by the Ministry of Finance, the banking sector witnessed a reversal in the deterioration of the situation of bad loans with the reduction of NPA in 1.06 lakh crore and the record recovery of loans of Rs 1.21 lakh crore in the last fiscal year. DP CS ABM

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