Terming the lending restriction on some banks as temporary phenomenon, Financial Services Secretary Rajiv Kumar today said the status of all 11 state-owned banks under prompt corrective action (PCA) of the RBI would be reviewed on May 17.
The review meeting would deliberate on steps taken by these banks to come out of the PCA status.
"We have requested all of them (banks) to join us on May 17. The review meeting is happening on May 17. So, they have taken measures to come out of it as these (PCA actions) are temporary phenomenon," Kumar told reporters.
He further said the banks which are out of the PCA ambit have a crucial role to play in the economy.
"The non-PCA banks have to lead the growth. Loan demand is picking up, so they have to support economic activity," Kumar said.
Meanwhile, Allahabad Bank today said the RBI has imposed restriction on lending and deposit taking by the bank following deterioration in its financial health.
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Earlier last week, public sector Dena Bank was also put under restriction by the RBI in terms of lending and recruitment by the bank owing to high bad loans on its books.
Dena Bank's gross non-performing assets (NPAs) have hit a high of 22.4 per cent of the gross advances as on March 31, 2018 (Rs 16,361.44 crore), from 16.27 per cent as of end-March 2017 (Rs 12,618.73 crore).
Net NPAs were also up at 11.95 per cent (Rs 7,838.78 crore) from 10.66 per cent (Rs 7,735.12 crore).
The high level of NPAs resulted into the bank reporting widening of its net loss to Rs 1,225.42 crore in the March quarter from a net loss of Rs 575.26 crore in the same period year earlier.
Speaking on Dena Bank, Kumar said, "If you read the reforms agenda it very clearly say that each PCA bank will adopt the differentiated banking strategy.
"There were conditions that they will not increase RWAs (risk weighted assets). So therefore, keep connecting dots. Don't see any action in isolation. It is happening step by step and it will keep happening till entire cleaning takes place."
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