RBI clarifies ‘prompt corrective action’ is aimed at improving banks’ health
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Mumbai: The Reserve Bank of India (RBI) on Monday clarified that prompt corrective action (PCA) is aimed at improving banks’ health, and asked the public to continue their banking relations with lenders placed under PCA.
So far, IDBI Bank, UCO Bank and Dena Bank have been placed under PCA because of high net non-performing assets (NPA) and negative return on assets. The RBI had revised the PCA framework on 13 April 2017.
“The Reserve Bank has clarified that the PCA framework is not intended to constrain normal operations of the banks for the general public,” the central bank said.
The RBI’s clarification comes in the wake of misinformation about the PCA framework, with messages asking people to withdraw their deposits and warning against opening new fixed deposits.