No question of closing down any public sector bank clarifies government

The government clarified that the government was committed to strengthen public sector banks and dismissed rumours of closure os PSBs.

In a statement, the Reserve Bank of India said that it has come across some "misinformed communication circulating in some section of media, including social media, about closure of some public sector banks in the wake of their being placed under the prompt corrective action (PCA).

"No question of closing down any bank. Government is strengthening PSBs by 2.11 lakh crore recapitalisation plan. Do not believe rumour mongers. Recap, Reforms roadmap for PSBs firmly on track," said Banking Secretary Rajeev Kumar in a tweet.

The government in October announced plans to inject Rs 2.11 lakh crore of equity in PSU banks - comprising of Rs 1.35 lakh crore through recapitalisation bonds, Rs 18,000 from budgetary resources and Rs 58,000 crore to be raised by the banks from the market.

The PCA framework is not intended to constrain normal operations of the banks for the general public, the RBI further clarified.

It emphasised that the PCA framework has been in operation since December 2002 and the guidelines issued on April 13, 2017 are only a revised version of the earlier framework.

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