After Reserve Bank of India (RBI) lifted restrictions under prompt corrective action (PCA) on three public sector banks last week, Finance Minister Piyush Goyal said the government will try to help lift the restrictions on other public sector banks too.
There are eight more public sector banks (PSBs) that are under the PCA framework after restrictions were lifted from Bank of India, Bank of Maharashtra and Oriental Bank of Commerce. While interacting with the business community at an event organised by industry body CII, Mr. Goyal said, “we will try to lift restrictions on other PCA banks soon,” when one industry body pointed out loan growth was impacted since many banks were under PCA.
Capital infusion
The government had infused capital in banks that was used to increase provisions and lower the net NPA ratio enabling RBI to lift restrictions on the three banks.
Breaching net NPA ratio of 6% is one of the conditions that trigger restrictions.
While responding to another question, the Finance Minister said development finance institutions ‘are pressing need of the hour’ for infrastructure development.
Most of the erstwhile DFIs like ICICI, IDBI have been converted into universal banks.
In his speech, r.Goyal said all households will have electricity by next month. This was in line with the objective of the gvernment to provide all facilities to all villages including 100% sanitation coverage, fuel to all households, digital technology, education and healthcare for all, he said.