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  Business   Economy  02 Jun 2018  Nine banks under PCA send recovery plans

Nine banks under PCA send recovery plans

PTI
Published : Jun 2, 2018, 12:39 am IST
Updated : Jun 2, 2018, 6:10 am IST

Of these, 9 banks have already submitted report to the department of financial services, an official said.

Piyush Goyal
 Piyush Goyal

New Delhi: As many as 9 PSU banks, which are currently under RBI watch for poor financial health, have submitted a two-year recovery plan to the government entailing stake sale in subsidiaries and reduction of corporate loan book.

Finance minister Piyush Goyal had last month asked these 11 PSU banks to come up with a plan to strengthen finances and meet the RBI’s capital adequacy norms.

Of these, 9 banks have already submitted report to the department of financial services, an official said.

The 11 banks under Prompt Corrective Action are Dena Bank, Allahabad Bank, UBI, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, CBI, IoB, OBC and Bank of Maharashtra.

Under the PCA, banks face restrictions on distributing dividends and remitting profits.

The owner may be asked to infuse capital into the lender. Besides, the lenders are stopped from expanding their branch networks and need to maintain higher provisions.

Management compensation and directors fees are also capped.  The recovery plan as presented include cost cutting, reducing branches size, closing foreign branches, shrinking corporate loan book as well as sell risky assets, the official said.    

Tags: piyush goyal, allahabad bank, uco bank