Beyond PCA

Public sector banks need a new governance structure

The Reserve Bank of India on Tuesday took three more commercial banks out of the prompt corrective action (PCA) framework, thus opening up the possibility for these banks to resume lending and other banking services. Two of these are public sector banks — Allahabad Bank and Corporation Bank — and third is Dhanlaxmi Bank, a small private lender. In its statement, the RBI said that the Board for Financial Supervision (BFS) reached this decision after its review meeting to assess the performance of banks under the PCA on February 26. The BFS noted that the government has infused fresh capital