RBI's BFS to meet on Jan 31st to decide fate of banks under PCA
Government wants PSU Banks to come out of PCA because of two main reasons; Firstly, more banks will be able to lend to industry which will help in creating more economic activity, and Secondly, once the smaller banks under PCA are stabilized, it will help the government to implement initial idea of merger of smaller PSU banks to create few big banks.
Currently, there are 11 PSBs along with one private sector bank Dhanlaxmi Bank under the PCA framework. RBI issued new framework of PCA in April 2017. Image source: Reuters