RBI lifts PCA curbs on Allahabad Bank, Corporation Bank and Dhanlaxmi Bank
27 Feb 2019
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The Reserve Bank of India (RBI) on Tuesday lifted curbs under the Preventive and Corrective Actions (PCA) regulations on Allahabad Bank and Corporation Bank after the government issued fresh capital into the two banks as part of its bank recapitalisation programme.
The central bank’s Board for Financial Supervision (BFS), at its meeting held on 26 February, reviewed the performance of banks under PCA and noted that the government on 21 February infused fresh capital into various banks, including some of the banks currently under the PCA framework. Allahabad Bank and Corporation Bank had received Rs6,896 crore and Rs9,086 crore, respectively, the BFS noted.
The infusion of fresh funds 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.
Accordingly, based on the principles adopted by the BFS in its earlier meeting, it was decided that Allahabad Bank and Corporation Bank be taken out of the PCA Framework subject to certain conditions and continuous monitoring, the RBI stated.
RBI also announced its decision to take private sector lender Dhanlaxmi Bank out of the PCA framework, subject to certain conditions and continuous monitoring, as the bank was found to be not breaching any of the Risk Thresholds of the PCA framework.
RBI said it would continuously monitor the performance of these banks under various parameters.
RBI to issue new Rs100 banknotes : RBI on Tuesday said it would shortly issue Rs100 denomination banknotes in Mahatma Gandhi (New) Series bearing the signature of governor Shaktikanta Das. The design of these notes is similar in all respects to Rs100 notes in Mahatma Gandhi (New) Series. All banknotes in the denomination of Rs100 issued by the RBI in the past will continue to be legal tender, it added.
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