Business / RBI Takes Three Banks Off Corrective Action List

Three banks are state-controlled Allahabad Bank &U Corporation Bank & privately held Dhanlaxmi Bank. Last month, RBI removed three of these banks from its so-called prompt corrective action (PCA) list and has now removed three more. RBI lifted regulatory constraints on three banks on Tuesday after they received a capital injection from the government. RBI said banks had made systemic improvements to maintain numbers.

The Reserve Bank of India (RBI) lifted regulatory constraints on three banks on Tuesday after they received a capital injection from the government. The RBI had imposed lending curbs on 11 state banks over the past few years after their capital ratios fell below minimum requirements and bad loans surged.

Last month, RBI removed three of these banks from its so-called prompt corrective action (PCA) list and has now removed three more.

The three banks are state-controlled Allahabad Bank and Corporation Bank and privately held Dhanlaxmi Bank.

The two state banks were taken off the list by the RBI under its new Governor Shaktikanta Das following increased capital ratios and loan-loss provisioning.

"This has shored up their capital funds and also increased their loan loss provision to ensure that the PCA parameters were complied with," the RBI said referring to the government's latest capital injection.

The RBI said the banks had made structural and systemic improvements to maintain these numbers.