‘PCA only to improve banks’ financial health’

Govt. rules out closure of any PSB

Updated - December 22, 2017 10:11 pm IST

Published - December 22, 2017 10:10 pm IST - Mumbai

Mumbai 26/07/2011  Enterance of  RBI building in Mumbai on Tuesday, July 26, 2011.  Photo: Vivek Bendre

Mumbai 26/07/2011 Enterance of RBI building in Mumbai on Tuesday, July 26, 2011. Photo: Vivek Bendre

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.

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