HYDERABAD: State-run banks, especially those in troubled waters, got renewed hopes on Thursday. At least half a dozen bankers hunkered down at the RBI headquarters at Fort Road in Mumbai for a stock-taking meeting called by the new Governor, Shaktikanta Das.
During their interaction, bankers pitched for a softened stance by the RBI at least on some of the regulatory issues, which are preventing them from conducting regular business. “Good introductory interaction about the current known concerns of banks,” Dinabandhu Mohapatra, MD & CEO, Bank of India, told Express.
The other public sector banks (PSB) including State Bank of India, IDBI Bank, Punjab National Bank, Union Bank of India and Central Bank of India met the Governor. However, some like Bank of Baroda couldn’t make it to the meeting, which also was attended by RBI’s four deputy governors and executive directors.
According to sources, the PSBs wanted the central bank to revisit its February 12 circular, which knocked out all of the previous debt-restructuring schemes in one stroke. However, the banks were of view that at least a few schemes like Strategic Debt Restructuring were faring well. Similarly, banks sought relaxation from the one-day default norm, but deputy governor N S Viswanathan maintained that it merely enforces good accounting behaviour.
Among other issues, the meeting also touched upon Prompt Corrective Action (PCA) —if at least some of the trigger points can be relaxed. Because banks under PCA are not adequately capitalised and since they are also restricted from taking deposits and lending to corporate customers, profitability was under stress and so was their return on assets/equity, which remained negative. Unless capital is pumped or they are allowed to take deposits and lend, revival will be a long road.