RBI removes Allahabad Bank, Corp Bank, Dhanlaxmi from PCA framework

Business Standard RBI removes Allahabad Bank, Corp Bank, Dhanlaxmi from PCA framework

Move will allow them to carry on normal business, including lending

Economy & Policy: The Reserve Bank of India (RBI) removed three commercial banks – Allahabad, Corporation and Dhanlaxmi -- from the prompt corrective action (PCA) framework. This will allow them to carry on normal business, especially lending.

Early this month, RBI had taken out three public sector banks - Bank of India (BoI), Bank of Maharashtra (Mahabank), and Oriental Bank of Commerce (OBC) out of the framework.

Mumbai-based IDBI Bank, Central Bank of India, Dena Bank, Chennaibased Indian Overseas Bank and two Kolkata-based lenders -- United Bank of India and UCO Bank -- are still under the PCA framework.

RBI in a statement said the Board for Financial Supervision (BFS), in its meeting held on February 26, 2019 reviewed the performance of banks under PCA. BFS noted that the Government of India has infused fresh capital on February 21, 2019 into various banks including some of the banks currently under the PCA framework.

RBI removes Allahabad Bank, Corp Bank, Dhanlaxmi from PCA framework Two state-owned banks -- Allahabad Bank and Corporation Bank -- had received Rs 6,896 crore and Rs 9,086 crore respectively as capital from the Government of India. This has shored up their capital funds and also increased their loan loss provision to ensure that the PCA parameters were complied with.

These two banks have also made the necessary disclosures to the Stock Exchange that post infusion of capital, the capital adequacy ratio (CAR), Common Equity Tier 1, Net Non-Performing Assets and Leverage Ratios are no longer in breach of the PCA thresholds...Read More