Govt dismisses rumours about closing down of public sector banks
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In a tweet, Financial Services Secretary Rajeev Kumar said the government is strengthening these banks by re-capitalisation plan of 2.11 lakh crore rupees.
He appealed to the people not to believe rumor mongers and said that the reform road map for public sector banks is firmly on track.
The Reserve Bank of India, RBI has initiated 'prompt corrective action' (PCA) against some banks including Bank of India.
The RBI, on its part also clarified that the PCA framework is not intended to constrain normal operations of the banks for the general public.
The Reserve Bank in a statement 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 RBI said that under its supervisory framework, it uses various measures and tools to maintain sound financial health of banks.
It said, 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 and others are breached.
The RBI 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. #casansaar (Source - NewsonAir)
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