The trouble of this bank will end, business will increase

Central Bank of India: In January next year, the Central Bank of India can be brought out of the Prompt Corrective Action (PCA) framework. According to the information, after December 31, if the decision comes in favor of the Central Bank, then this bank will be able to do business freely. The Reserve Bank will evaluate its financial position after the results of the bank in the December quarter, then it will give a decision.

It is also being said in the news that the capital requirement in public sector banks will also be reviewed by the RBI. At present, no new capital has been sought from any bank. After being taken out of the PCA framework, the bank will be able to distribute loans freely and increase business. If a bank remains under the purview of the PCA of the Reserve Bank, then there are many restrictions related to distributing loans and doing business.

Yeh Bank PCA get out of

In the month of September itself, RBI took Indian Overseas Bank (IOB) out of the PCA framework. In the same month, UCO Bank was also taken out of this framework. Banks cannot even expand their branch while in PCA.

Why PCA is kept In

When RBI feels that a bank does not have enough capital to meet the risk. Also, if there is no income and profit is not coming from the money lent, then that bank is put in ‘PCA’. So that immediate steps can be taken to improve his financial condition.

To know when a bank is going through this situation, RBI has set some parameters, in which it is shown by the fluctuations. Like CRAR, Net NPA and Return on Assets. Keeping these factors in mind, RBI takes this decision.

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