New Delhi : The finance ministry is not seeking any relaxation from RBI in its prompt corrective action (PCA) framework and has instead asked banks to adopt differentiated business strategy, exit non-core businesses and focus on core competencies, an official said on Monday.
Finance Minister Piyush Goyal last week met heads of 11 public sector banks (PSBs) which have been identified under the PCA to check their deteriorating financial health and promised all possible help to strengthen them.
Banks facing PCA are reeling under mounting non-performing assets (NPAs) or bad loans. As of December end Indian banks had NPAs of more than Rs 8 lakh crore of which the major chunk was from PSBs.
Besides, some lenders have been hit by frauds. PNB, for instance, has reported fraud of $2 billion, or over Rs 13,400 crore, carried out allegedly by diamond jeweller Nirav Modi and his associate Mehul Choksi.
Under the PCA, banks face restrictions on distributing dividends and remitting profits, while the owner may be asked to infuse capital into the lender.