The finance ministry would soon initiate a performance review of heads of public sector banks that are under the RBI's Prompt Corrective Action (PCA) as part of the reform process, official sources said.
So far, the Reserve Bank has put 12 public sector banks (PSBs) under watch in view of lagging on certain performance parameters like unexpected level of high non-performing assets (NPAs), low capital level, low return on assets, etc.
These parameters indicate weak financial health of lending institutions and a need to initiate remedial measures to put them on a right course.
Performance review of the top level management of all such banks would be undertaken soon, official sources said.
During the current fiscal, IDBI Bank has been committed the highest infusion of Rs 10,610 crore, followed by Bank of India, Rs 9,232 crore and UCO Bank (Rs 6,507 crore).
Among other PCA lenders Central Bank of India was committed Rs 5,158 crore, Indian Overseas Bank - Rs 4,694 crore; Oriental Bank of Commerce Rs 3,571 crore; Dena Bank - Rs 3,045 crore; Bank of Maharashtra - Rs 3,173 crore; United Bank of India - Rs 2,634 crore; Corporation Ban Rs 2,187 crore and Allahabad Bank - Rs 1,500 crore by the end of 2017-18.
In a notification issued by RBI that time, the mandatory action that would be taken when a bank breaches the risk threshold includes restriction on dividend payment/remittance of profits, restriction on branch expansion, higher provisions, restriction on management compensation and director's fees.
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