Corporation and Allahabad Bank are taken out of Prompt Corrective Action (PCA) Framework

Corporation, Allahabad Bank  and Dhana Lkshmi Banks are taken out of Prompt Corrective Action (PCA) Framework.

Pursuant to Government of India has infused fresh capital on February 21, 2019 into various banks including Allahabad Bank and Corporation Bank. Allahabad resevied Rs.6896 crre and Corporation Bank had received Rs.9086 crore. The infusion of fresh capital has shored up their capital funds and also increased their loan loss provision to ensure that the PCA parameters were complied with. The two banks have also made the necessary disclosures to the Stock Exchange that post infusion of capital, the CRAR, CET1, Net NPA and Leverage Ratios are no longer in breach of the PCA thresholds. The banks also apprised RBI of the structural and systemic improvements put in place to maintain these numbers. In view of the above Board for Financial Supervision (BFS), in its meeting held on February 26, 2019 reviewed the performance of banks under PCA and decided that Allahabad Bank and Corporation Bank be taken out of the PCA Framework subject to certain conditions and continuous monitoring. It has also been decided to take Dhanlaxmi Bank out of the PCA Framework, subject to certain conditions and continuous monitoring, as the bank is found to be not breaching any of the Risk Thresholds of the PCA Framework.

The communique said that RBI will continuously monitor the performance of these banks under various parameters.