No question of closing down any public sector bank: Centre & RBI

Indian Express
New Delhi  December 23, 2017 

 

The government, however, is working on consolidation among the state-owned banks.

The finance ministry and the Reserve Bank of India on Friday dismissed rumours of closure of certain public sector bank, and said the government was committed to strengthen the PSBs. The decision of the RBI to initiate a ‘prompt corrective action’ (PCA) against Bank of India led to rumours that the government may close down some banks.

The RBI in a statement on Friday said that it has come across some “misinformed communication circulating in some section of media, including social media, about closure of some public sector banks in the wake of their being placed under the PCA.”

The government too dismissed such rumours. “No question of closing down any bank. Government is strengthening PSBs by 2.11 lakh crore recapitalisation plan. Do not believe rumour mongers. Recap, Reforms roadmap for PSBs firmly on track,” said Banking Secretary Rajeev Kumar in a tweet on Friday.

The government in October announced plans to inject Rs 2.11 lakh crore of equity in PSU banks — comprising of Rs 1.35 lakh crore through recapitalisation bonds, Rs 18,000 from budgetary resources and Rs 58,000 crore to be raised by the banks from the market.

The government, however, is working on consolidation among the state-owned banks. The RBI clarified that “the PCA framework is not intended to constrain normal operations of the banks for the general public”.
It emphasised that the PCA framework has been in operation since December 2002 and the guidelines issued on April 13, 2017 are only a revised version of the earlier framework.

Besides Bank of India, the RBI has also initiated similar action against lenders including IDBI Bank, Indian Overseas Bank and UCO Bank. Shares of Bank of India closed down by 0.61 per cent at Rs 171.65 at the National Stock Exchange on Friday.
The RBI said that under its supervisory framework, it uses various measures/tools to maintain sound financial health of banks.

“PCA framework is one of such supervisory tools, which involves monitoring of certain performance indicators of the banks as an early warning exercise and is initiated once such thresholds as relating to capital, asset quality etc. are breached,” it said.

The objective is to facilitate the banks to take corrective measures including those prescribed by the RBI, in a timely manner, in order to restore their financial health.

The framework also provides an opportunity to the RBI to pay focused attention on such banks by engaging with the management more closely in those areas. “The PCA framework is, thus, intended to encourage banks to eschew certain riskier activities and focus on conserving capital so that their balance sheets can become stronger,” the RBI added.

Reference-http://indianexpress.com/article/business/economy/no-question-of-closing-down-any-public-sector-bank-centre-rbi/

Comments

Post a Comment

Popular posts from this blog

India Joins Russia in Voting Against West-Backed Move to Expand Powers of OPCW

The Wire: June 28, 2018 New Delhi: India voted against a UK-backed move that will allow the global chemical weapons watchdog to apportion blame for illegal attacks, criticising the decision to grant “unchecked powers” to the head of the group which could be used for “partisan” purposes. On Wednesday, more than two-thirds of the member states of the Organisation for the Prohibition of Chemical Weapons (OPCW) voted to authorise the international body to identify the perpetrators and sponsors of a chemical weapons attack. It also specifically called on the OPCW’s technical secretariat to begin work on identifying the perpetrators behind the use of chemical weapons in Syria. The draft decision, sponsored by 30 countries, was adopted at the fourth special session of the conference of the states parties to the Chemical Weapons Convention at the Hague, with 82 in favour and 24 negative votes. While Europe, the United States and their allies voted ‘yes’, there was strong oppo...
Read more

ED tracks Swiss Bank A/Cs of Agusta scamster

The Poineer February 10,2019 Rakesh K Singh The Enforcement Directorate (ED) has tracked a dozen Swiss bank accounts in the name of Rajiv Saxena, who is key accused in the Rs 3,600 crore AgustaWestland VVIP chopper scam. The ED has also found out accounts held by  his family members and associates where the kickbacks in the now scrapped deal were allegedly parked. Two bank accounts are in the name of Rajiv Saxena’s  associates Pankaj Jain and Sumita Jain who are also the authorised signatories. The  third is in the name of another associate Ajit Singh Bubber, but Rajiv and his family members are authorised signatories. The remaining nine accounts are largely owned and operated by Rajiv, his family members and associates. Rajiv Saxena was deported by the UAE authorities on January 30 and the ED formally arrested him the next day and a court later granted his remand to the agency. He is currently undergoing custodial interrogation by the ED. The agency had in 2017...
Read more

As financial insecurity rises in urban India, so does investment in insurance

Image
Scroll.in March 13, 2020 Urban Indians are becoming less confident about their financial security. Up to 58% of them fret over financial independence post retirement, which is a 4% increase from last year. An equal share of urban Indians worry about meeting their daily medical expenses and sustaining their current lifestyle once they stop working. The findings are part of a survey published by Delhi-based Max Life Insurance in association with London-based consultancy Kantar. The firms surveyed 7,014 respondents in 25 cities, including six metros, nine tier-1 cities, and 10 tier-2 cities, between December 2019 and January 2020. Source: Max Life Insurance via Quartz The trends Source: Max Life Insurance via Quartz Source: Max Life Insurance via Quartz Source: Max Life Insurance via Quartz A significant share of urban Indians also say their families will have no financial support in the event of the breadwinner’s death. In such a scenario, around 57% believe the family sav...
Read more