Any decision regarding the PCA framework will be taken only after reviewing the capital.
In the new year, the Central Bank of India may come out of the Prompt Corrective Action (PCA) framework. According to the report of CNBC, after December 31, the central bank will be able to do business freely. It is believed that after the December quarter results are out, the Reserve Bank will be able to evaluate the financial position of the bank.
Any decision regarding the PCA framework will be taken only after reviewing the capital. It is also being said in the report that the capital requirement in public sector banks will also be reviewed. At present, no bank has sought fresh capital. After being taken out of the PCA framework, the bank will be able to freely distribute loans and do business. If a bank lives under the PCA framework of the Reserve Bank, then it has many restrictions related to disbursing loans and doing business.
IOB and UCO Bank were pulled out of the framework
Earlier in the month of September, the Reserve Bank of India took Indian Overseas Bank out of the PCA framework. In the same month, UCO Bank was also taken out of this framework. Banks cannot even expand their branch during this period.
Why banks are kept under the ambit of PCA
When the RBI feels that a bank does not have enough capital to face the risk, the money lent is not earning and profit is not being made, then the bank puts that bank in ‘PCA’, so that its financial position Immediate steps can be taken for rectification. To know when a bank is going through this situation, RBI has fixed some indicators, in which fluctuations show it. Like CRAR, Net NPA and Return on Assets. Keeping these factors in mind, RBI takes this decision.
2 public sector banks will be privatized
Here the government has decided to privatize two public sector banks in the current financial year. Central Bank of India and Indian Overseas Bank are ahead in this race. On Wednesday, there were some reports about the privatization of banks, after which the shares of these two banks registered a huge rise.
Shares increased by 20 percent due to the news of privatization
During the trading on Wednesday, the stock of IOB registered a rise of 20 percent on the news of privatization, while the share of Central Bank of India rose 15 percent. Apart from this, shares of Bank of Maharashtra and Bank of India also registered a rise.
Statement issued by IOB, Central Bank
Later a statement was issued by Indian Overseas Bank. It was said in this statement that there is nothing new about privatization at present. In such a situation, the reason for the rise in shares is not understood. A similar statement was also issued by the Central Bank of India.
Also read, Know what is P-notes, through which investment reached 43-month high
Also read, Big Basket opens its first retail outlet in Bangalore in the name of Fresho, know what is the company’s plan
.
