No early exit for banks under PCA till FY20 despite fresh capital: Icra

Icra expects further capital infusion of Rs 135 billion in PCA banks during FY19 with capital infusion of Rs 119 billion till now

The 11 public sector banks (PSBs) under the prompt corrective action (PCA) framework are unlikely to get an exit before FY20, despite the government’s capital infusion plans, ratings agency Icra has said. 

“With net NPAs of 11.2 per cent as on September 30, capital ratios below the regulatory thresholds and high chances of losses during FY19, the exit for PCA banks appears difficult based on existing regulations and the expected financial performance of FY19,” said Karthik Srinivasan, group head, financial sector ratings, Icra. Icra expects all PCA banks to report cumulative losses of Rs 490 billion during FY19. 

“Even if the government