The Reserve Bank of India (RBI) has once again clarified that prompt correction action (PCA) is imposed to encourage banks to improve their financial health.
The reiteration comes in the wake of rumours on social media that some of the banks that are under PCA could be closed down.
“The PCA framework is intended to encourage banks to eschew certain riskier activities and focus on conserving capital so that their balance sheets can become stronger,” RBI said. Rajiv Kumar, Secretary, Financial Services, also tweeted that there was no question of closing down any public sector bank and added that the government was strengthening banks by recapitalising them.
