The markets celebrated when the government approved a capital infusion plan for weak banks last October. Especially, the share prices of those under the Reserve Bank’s (RBI’s) ‘prompt corrective action’ (PCA) ambit rose 15-34 (except for Dena Bank). Of the ~2.1 trillion proposed, the government infused ~900 billion in public sector banks (PSBs) during FY18; a little over 60 per cent was for PCA banks.
However, with the recent developments in the sector, these efforts seem insufficient. The 11 PCA bank stocks have been under pressure.
Due to high provisioning for the RBI’s new rules on non-performing assets (NPAs or bad loans)