Govt says no question of closing any PSB

Govt says no question of closing any PSB

Dismissing rumours, both the government and the Reserve Bank said on Friday there was no question of closing any public sector bank (PSB).

The decision of the Reserve Bank to initiateaPrompt Corrective Action (PCA) against large stateowned Bank of India led to rumours that the government may close down some banks.The RBI said it has come across some "misinformed communication" in some section of media, including social media, about closure of some PSBs in the wake of their being placed under the PCA.

The government, too, dismissed the rumours, saying on the contrary, it is planning to strengthen stateowned banks."The government is strengthening PSBs by Rs 2.11 lakhcrore recapitalisation plan.Do not believe rumour mongers.Recap, Reforms road map for PSBs firmly on track," said financial services Secretary Rajeev Kumar inatweet.

The RBI said, "the PCA framework is not intended to constrain normal operations of the banks for the general public".The central bank had issued a similar clarification in June also.It emphasised that the PCA framework has been in operation since December 2002 and the guidelines issued on April 13 are onlyarevised version of the earlier framework.

Besides Bank of India, the RBI has also initiated similar action against other PSBs, including IDBI Bank, Indian Overseas Bank and UCO Bank.The RBI said that under its supervisory framework, it uses various measures/tools to maintain sound financial health of banks

"The PCA framework is one of such supervisory tools, which involves monitoring of certain performance indicators of the banks as an early warning exercise and is initiated once such thresholds as relating to capital, asset quality etc. are breached," it said.

Banks lost Rs 16,789 crore on account of fraud in financial year 201617, the finance ministry said in the Lok Sabha on Friday.Finance Shiv Pratap Shukla said an interdisciplinary standing committee on cybersecurity was constituted by the RBI comprising academia, information security audit, forensic and cybersecurity experts.

The committee reviews threats inherent in existing or emerging technology, and suggests policy intervention.In another reply, he said incidents of bank robbery, theft, dacoity and burglary were reported from different parts of the country during 201617. The amount involved in such incidents totalled about Rs 65.3 crore.

The Business Standard, New Delhi, 23th December2017