INSUBCONTINENT EXCLUSIVE:
The government said last week, it would inject Rs 48,239 crore into 12 state lendersThe Reserve Bank of India (RBI) lifted regulatory
constraints on three banks on Tuesday after they received a capital injection from the government
The RBI had imposed lending curbs on 11 state banks over the past few years after their capital ratios fell below minimum requirements and
bad loans surged.Last month, RBI removed three of these banks from its so-called prompt corrective action (PCA) list and has now removed
three more.The three banks are state-controlled Allahabad Bank and Corporation Bank and privately held Dhanlaxmi Bank.The two state banks
were taken off the list by the RBI under its new Governor Shaktikanta Das following increased capital ratios and loan-loss
provisioning."This has shored up their capital funds and also increased their loan loss provision to ensure that the PCA parameters were
complied with," the RBI said referring to the government's latest capital injection.The RBI said the banks had made structural and systemic
improvements to maintain these numbers.The RBI took Dhanlaxmi Bank off the list because it was not in breach of any of the risk
thresholds.The government said last week, it would inject Rs 48,239 crore ($6.78 billion) into 12 state lenders as part of its
recapitalisation programme."RBI will continuously monitor the performance of these banks under various parameters," the RBI said.There are
21 publicly listed state-run banks in the country that provide about two-third of total loans
With nearly half of them under a PCA plan and the rest cautious due to a record $150 billion in bad debt, the government has been keen to
relax the curbs to boost their ability to lend.($1 = Rs 71.16)
