3 Public Sector Banks Freed From PCA Framework

Bank of India, Bank of Maharashtra and Oriental Bank of Commerce have been allowed to exit the PCA framework fully. The three lenders were part of 11 government-owned banks put under the framework in 2017 and 2018.

In December, the government had announced a capital infusion of Rs 10,000 crore for Bank of India, Rs 5,500 crore for Oriental Bank of Commerce and Rs 4,500 crore for Bank of Maharashtra, which helped the banks coming out of the framework.

The RBI had invoked PCA for Bank of Maharashtra in June 2017, Oriental Bank of Commerce in October and Bank of India went into the framework in December that year. The RBI’s decision to impose lending restrictions on these banks had become a flashpoint between the regulator and the government, which wanted the lending capacity to be freed up.

Source: BloombergQuint

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