The Reserve Bank of India has allowed 3 more banks to come out of the prompt corrective action framework. These banks are Allahabad Bank, Corporation Bank and Dhanlaxmi Bank. The decision would mean all the lending restrictions placed on them are being removed and they can make more credit available to consumers. The move comes following the government’s decision to infuse more capital in the public sector banks and the RBI announcing a liberal monetary policy. The RBI had earlier taken out 3 banks – Bank of India, Bank of Maharashtra and Oriental Bank of Commerce from the PCA framework, which apart from restricting lending also put a ban on expanding branch network. The RBI said in a statement its board for financial supervision reviewed the performance of banks under PCA and noted that the government has infused fresh capital into various banks including some of the banks currently under the PCA framework. It said the capital infusion has shored up their capital funds and also increased their loan loss provision to ensure that the PCA parameters were complied with.
