Indian gov’t dismisses reports about closing down of public sector banks

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The Indian government Saturday refuted reports about the closing down of public sector banks in the country and said it was strengthening them with recapitalization plan.

“No question of closing down any bank. Government is strengthening public sector banks (PSB) by a 2.11-lakh crore INR (32.95-billion-U.S. dollars) recapitalization plan. Do not believe rumor mongers. Recapitalization, reforms roadmap for PSBs is firmly on track,” Rajiv Kumar, a senior government official at the Ministry of Finance, said.

India’s state-run broadcaster All India Radio (AIR) said Saturday that the country’s central banking institution, Reserve Bank of India (RBI), had initiated “prompt corrective action (PCA)” against some banks including the Bank of India.

“RBI said under its supervisory framework, it uses various measures and tools to maintain sound financial health of banks,” the broadcaster said.

“The objective of PCA is to facilitate the banks to take corrective measures including those prescribed by the RBI, in a timely manner in order to restore their financial health.”

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