Rumor about nine banks to be closed by RBI- Viral News

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Hey Guys today I am informing you about “Rumor about nine banks to be closed“.

Recently, you must have come across a WatsApp message, which lists nine banks that Reserve Bank of India will apparently shut down. The message ends with a warning for readers to manage their cash immediately. This message creates chaos and make people freaking out.  Also, a video published by “Whistleblower News India” on YouTube about nine banks will be shutting down due to their NPA (Non performing Asset) or bad loan problem.  People are worrying about their accounts with these listed banks. However, turns out this is just a spam. So, take a look and know what this is about.

nine bank closing viral fake news in watsapp

This WatsApp message in question lists Corporation Bank, UCO Bank, IDBI Bank, Bank of Maharashtra, Andhra Bank, Indian Overseas Bank, Central Bank of India, Dena Bank, and the United Bank of India. According to the forwarded message,” these nine banks will be permanently shut down by the central bank, and that people should take suitable action in respect of your cash in your account (all types).”

Or

Nine banks will be closed permanently by Reserve bank of India. If anybody having transactions in it please kindly withdraw it.

The names of the banks are:
Corporation Bank,
UCO Bank,
IDBI,
Bank of Maharashtra,
Andhra Bank,
Indian Overseas Bank,
Central Bank of India,
Dena Bank and United Bank of India

 

However, the truth being, Reserve Bank of India cannot actually shut these banks down, even if it were to; these listed banks are owned by the government of India. Reportedly, there is no discussion of any permanent shut down of these banks, but they are going under a Prompt Corrective Action (PCA) invoked by the Reserve Bank of India. The PCA is essentially meant to have a bank focus on their recovery of bad loans. And despite going under the PCA, there is no restriction on taking deposits or giving out loans for these banks.

 

As per the RBI notification(June 5,2017)

 

RBI Clarification on Banks under Prompt Corrective Action

 

The Reserve Bank of India has come across some misinformed communication circulating in some section of media including social media, about the Prompt Corrective Action (PCA) framework.

The Reserve Bank has clarified that the PCA framework is not intended to constrain normal operations of the banks for the general public.

It is further clarified that the Reserve Bank, under its supervisory framework, uses various measures/tools to maintain sound financial health of banks. PCA framework is one of such supervisory tools, which involves monitoring of certain performance indicators of the banks as an early warning exercise and is initiated once such thresholds as relating to capital, asset quality etc. are breached. Its objective is to facilitate the banks to take corrective measures including those prescribed by the Reserve Bank, in a timely manner, in order to restore their financial health. The framework also provides an opportunity to the Reserve Bank to pay focused attention on such banks by engaging with the management more closely in those areas. The PCA framework is, thus, intended to encourage banks to eschew certain riskier activities and focus on conserving capital so that their balance sheets can become stronger.

The Reserve Bank has emphasized that the PCA framework has been in operation since December 2002 and the guidelines issued on April 13, 2017 is only a revised version of the earlier framework.

Ajit Prasad
Assistant Adviser

Press Release: 2016-2017/3288

You can check every information which RBI release on below link of RBI website:

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx

 

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