With expectations of improvement in bad loans situation in the next couple of quarters, Finance Ministry Official has said that more banks are unlikely to be brought under the Reserve Bank of India’s (RBI) Prompt Corrective Action (PCA) framework.
Official further noted that NPAs at banks grew during the fourth quarter of 2017-18 but in the coming months, they are expected to decline sizably, on the back of gaining strength of the debt resolution process under bankruptcy law. Ministry Official also added that the ministry does not expect more banks to come under the PCA, since there is clear pipeline for NPA resolution.
Besides, Finance Ministry Official is also expecting improvement in financial health of PSBs which are on the verge of coming under the PCA, within a quarter or two and added that the recent tight prudential norms released by the RBI on February 12 have added to the woes of the lenders.