The Finance Ministry would soon initiate a performance review of heads of public sector banks that are under the RBI’s Prompt Corrective Action (PCA) as part of the reform process, official sources said.
So far, the Reserve Bank has put 12 public sector banks (PSBs) under watch in view of lagging on certain performance parameters like unexpected level of high non-performing assets (NPAs), low capital level, low return on assets etc.
These parameters indicate weak financial health of lending institutions and a need to initiate remedial measures to put them on a right course.
As far as capital is concerned, the government has committed adequate funds, they said, adding that now these banks have to prove their mettle on the NPA front.
If these lenders “perform extraordinarily”, they will be rewarded, sources added.
The banks include IDBI Bank, Central Bank of India, Indian Overseas Bank, Dena Bank, Allahabad Bank, Bank of India among others.
