In a first, RBI plans to put weak private lenders under the hammer

In a first, the Reserve Bank of India (RBI) is planning to auction private sector banks that have been suffering from poor financial health for a prolonged period.

This is part of the RBI’s plan to adopt a differentiated regulatory regime for public and private banks under the Prompt Corrective Action (PCA) framework.

The banking regulator is seeking an early exit mechanism for private banks under PCA. One measure it is exploring is to auction these banks, said an RBI executive, requesting anonymity.

“Private banks cannot remain under the PCA framework forever. If the promoters are unable to revive the bank for a