Govt dismisses reports of closing down of public sector banks

In India, the government has said, there is no question of closure of any public sector bank. Dismissing rumours on the issue, Financial Services Secretary Rajeev Kumar said, the government is strengthening these banks by re-capitalisation plan of over 2 lakh crore rupees. In a tweet, he appealed to the people not to believe rumor mongers and said that the reform road map for public sector banks is firmly on track.

The RBI had initiated 'prompt corrective action' (PCA) against some banks including Bank of India. AIR correspondent reports the RBI said under its supervisory framework, it uses various measures and tools to maintain sound financial health of banks.

It said, PCA framework is one of such supervisory tools, which involves monitoring of certain performance indicators of the banks as an early warning exercise. RBI said, the objective is to facilitate the banks to take corrective measures including those prescribed by the RBI, in a timely manner in order to restore their financial health.