New Delhi: The finance ministry would soon initiate a performance review of heads of public sector banks that are under the RBI’s (Reserve Bank of India) Prompt Corrective Action (PCA) as part of the reform process, official sources privy to the development said.
So far, RBI has put 12 public sector banks (PSBs) under watch in view of lagging on certain performance parameters like unexpected level of high non-performing assets (NPAs), low capital level, low return on assets etc. These parameters indicate weak financial health of lending institutions and a need to initiate remedial measures to put them on a right course.
Performance review of the top level management of all such banks would be undertaken soon, they said. As far as capital is concerned, the government has committed adequate funds, they said, adding that now these banks have to prove their mettle on the NPA front.
If these lenders “perform extraordinarily”, they will be rewarded, they added.
In the recently announced Reforms Agenda for Responsive & Responsible PSBs, the government committed Rs52,311 crore for the 12 banks under PCA as against healthy banks which will be Rs35,828 crore by 31 March, 2018. During the current fiscal, IDBI Bank has been committed the highest infusion of Rs10,610 crore, followed by Bank of India, Rs9,232 crore and UCO Bank (Rs6,507 crore).
