New Delhi: Finance Minister Arun Jaitley on Thursday said he expected a few public sector banks (PSB) to exit the Reserve Bank of India’s prompt corrective action (PCA) framework regime after a fresh infusion of capital in them.
According to Jaitley, an additional amount of Rs 41,000 crore will be infused in some public sector banks.
“Providing capital to better performing PCA banks to achieve 9 per cent capital to risk weighted asset ratio; 1.875 per cent Capital Conservation Buffer and the six per cent net NPA threshold, facilitating them to come out of PCA,” Jaitley told reporters about the target of the government’s capital infusion in PSU banks.
Earlier in the day, the government presented in the Lok Sabha the second Supplementary Demands for Grants for 2018-19 for gross additional expenditure of Rs 85,948.86 crore which includes Rs 41,000 crore for recap of the PSBs that have been hit hard by Non-Performing Assets (NPAs).
Currently, 11 banks with high bad debts are under the PCA framework that prohibits them from further lending. On the insistence of the central government, the RBI’s Board for Financial Supervision is expected to meet soon on the issue.