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Government hopes all banks will be out of PCA list by June
By Anjana Das
New Delhi, Feb 11 (IANS) The Finance Ministry is hopeful that all banks will be out of the prompt corrective action (PCA) list by the end of June with their net NPA level coming in the range of 6 per cent by then.
The capital needs of all PCA banks have already been taken care of by the government through recapitalization in December 2018 and January 2019.
The government took three banks – Bank of India, Bank of Maharashtra and Oriental Bank of Commerce – out of the PCA list last month.
Two others – Dena Bank (part of merger with Vijaya Bank and Bank of Baroda) and IDBI Bank (through acquisition by LIC) – will be out of the PCA list by default.
This leaves just six banks in the list of weak banks that will be under pressure from the peer group to improve on their NPA improvisation performance. They could cut down their NPA by June this year, informed sources said.
While the BoB-Dena Bank-Vijaya Bank merged entity will start operations from April 1, 2019, the LIC-IDBI entity is in the process of starting banking operations.
LIC had in January completed the deal with IDBI bank. However, IRDAI Chairman Subhash Chandra Khuntia had stated that the approval for the LIC-IDBI Bank deal had been on the condition that the stake will eventually be brought down to 15 percent.
The six banks which will be eyeing non-PCA status in 2019 will be Allahabad Bank, United Bank of India, Corporation Bank, UCO Bank, Central Bank of India and Indian Overseas Bank.
There is no time deadline given to any bank from the Finance Ministry. Officials say it should be their own goal to get out of PCA. They need to improve all key parameters of NPAs, capital savings and non-core assets monetization.
All the agenda and roadmap have been given to them but they also have to realize that the sooner they get out of this framework restrictions, they will be able undertake more expansion and operations, the sources said.
Recently, the government announced infusion of Rs 28,615 crore into seven public sector banks (PSBs) through recapitalization bonds which have raised their capital ratio and improved recovery mechanism, targeting lower net NPA level.
Some banks are performing well and they are adequately capitalised as per the Basel norms. So, capitalization and loan recovery steps will facilitate them to come out of PCA.
The PCA framework kicks in when banks breach any of the three key regulatory trigger points: capital to risk weighted assets ratio, net non-performing assets (NPA) and return on assets (RoA).
Globally, PCA kicks in only when banks slip on a single parameter of capital adequacy ratio, and the government and some of the independent directors of the RBI board, like S. Gurumurthy, are in favour of this practice being adopted for the domestic banking sector as well.
–IANS
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Dr. Abhishek Verma Dedicates a Shelter in Memory of His Mother, Veena Verma, at KGMU; Inaugurated by Daughter Nicolle Verma
World-renowned business tycoon Dr. Abhishek Verma has supported Foodman Vishal Singh’s Hunger-Free World mission. In memory of his mother, Late Veena Verma, who was a 3 term Rajya Sabha MP.
Dr. Verma dedicated a state-of-the-art free permanent shelter for the attendants of patients at KGMU Medical University, Lucknow, under the aegis of Vijay Shree Foundation. His daughter, Nicolle Verma, inaugurated the shelter.
During the event, Foodman Vishal Singh honored Nicolle Verma by presenting her with a memento. Mrs. Nidhi Sharma and Avantika Yadav, associated with the organization, welcomed her with garlands. Following this, Nicolle Verma distributed essential items to the attendants and also handed out fruits. She became emotional remembering her grandmother on her birth anniversary.
On this occasion, she also inaugurated the “Veena Verma Sevalaya” in memory of her grandmother, Veena Verma, to serve the attendants. She expressed, “I feel proud that my family is engaged in nation-building as well as social service. Today, in collaboration with Vijay Shree Foundation founder Foodman Vishal Singh Ji, I feel immensely proud to dedicate this shelter for the poor, helpless, and needy attendants of patients battling serious illnesses like cancer. I am honored to be associated with the Hunger-Free World Mission for humanity.”
Inspired by the continuous humanitarian service provided by Vijay Shree Foundation over the past 17 years, Nicolle Verma donated 10 lakh rupees to support the cause. The purpose of this donation is to ensure that services continue for the needy attendants of patients suffering from severe illnesses in hospitals, as facilitated by Foodman Vishal Singh.
It is noteworthy that Dr. Abhishek Verma’s family has a legacy of public and philanthropic service. They are helping millions to carry forward the values and service work of their parents. On the occasion of his mother’s birth anniversary, Dr. Abhishek Verma dedicated this state-of-the-art permanent shelter at Lucknow Medical College to serve the attendants of patients through the Vijay Shree Foundation.
Supporting Foodman Vishal Singh’s Hunger-Free World mission, Dr. Abhishek Verma assured that he would continually support keeping this flame of humanity alive. He also promised to assist in providing medicines to the helpless patients.
Continuing her grandmother’s legacy of service, Nicolle Verma personally served food to the needy patients and attendants. She said, “It is our good fortune to have received the joy of doing this noble work today through Foodman Vishal Singh. I have taken another step forward in carrying my family’s values and cooperation by joining hands with the Vijay Shree Foundation. My father taught me to serve and help the needy, and I feel happy when I bring a smile to someone’s face.”
On the birth anniversary of the late Veena Verma, the event organizer, Vijay Shree Foundation founder Foodman Vishal Singh, said, “We feel proud and happy that Dr. Abhishek Verma, a globally renowned business tycoon, has extended his support to uplift our country from the hunger index. Today, on his mother’s birth anniversary, he inaugurated a state-of-the-art permanent shelter at Lucknow Medical College, which will always be helpful for the needy attendants of patients. It is a pleasure for me and the organization to receive the affection of Mr. Verma.”
The event was attended by General Manager Verma Family Office Hemant Garg, Sonu Rajput, and the organization’s volunteers, including Sandeep Singh, Parmeshwar Ji, Prashant Rao Gautam, Balram Singh, Ramesh Chaudhary, Suman, Jeetu, Anil, Suraj, Vinay, Manish Bhadauria, Manas Mehrotra, Vivek, Apurv, Happy, and others.
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