Government to infuse Rs 14,500 crore in UCO, Central Bank and Indian Overseas Bank
The Ministry of Finance will invest Rs 14,500 crore of capital in the next few days in the public sector banks, which are currently under the Prompt Corrective Action (PCA) framework of RBI. The Ministry of Finance can infuse Rs 14,500 crore in the next few days in weak banks kept under PCA rules.
Capital of 5,500 crores was poured in November last year
Sources said that the ministry has identified banks to give capital. The capital will be poured in the next few days. This will benefit the banks which are under prompt corrective action. The government has allocated a capital of Rs 20,000 crore for the current financial year to meet regulatory requirements in public sector banks. Punjab and Sindh Bank, out of 12 public sector banks, had a capital of Rs 5,500 crore in November last year. Was inserted
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Explain that this week, RBI has removed IDBI Bank from the Prompt Corrective Action (PCA) Framework. This week, IDBI Bank was relieved of the PCA ban of RBI after nearly four years on the basis of improvement in financial performance. Due to deteriorating financial situation, the RBI (RBI) put IDBI Bank in the PCA framework in May 2017.
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Learn What is PCA Framework?
Explain that when banks do business, they get caught in financial crisis. From time to time, the RBI issues guidelines and frameworks to get them out of the crisis. Prompt Corrective Action is a similar framework that determines the financial health of a bank. This framework has been in operation since December 2002 with changes from time to time.