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IDBI Bank out of PCA: An Analysis The decision of RBI to take IDBI Bank out of Prompt Corrective Action (PCA) on 10th March 2021 came as a surprise. No doubt, the central government (GoI) and LIC of India (LIC), brought in more than Rs.43,000 cr. as equity in the last four years, which helped the bank to maintain CRAR, NNPA ratios above trigger levels stipulated under PCA.  But, it is also a fact that the bank incurred substantial net losses in the last five years. Its Return on Assets (RoA), one of the triggers for bringing a Bank under PCA, was negative till March 2020. W hether RBI acted in a hurry? I attempted an analysis:     I. PCA Framework of RBI - What is it?: Matrix:*  To bring a bank under PCA framework, the following matrix is used: Criteria Indicator Risk Threshold (T1) Threshold (T2) Threshold(T3) Capital (Breach of either CRAR or CET1 Ratio to trigger PCA) CRAR+CCB (9...

 Carry Customers with you There are two principles to handle an aggrieved customer. Principle One - Customer is the King and the King is always right. Principle Two - If the customer is not reasonable, please follow principle one! In my 37 years of service as a banker, with 30 years in the front facing the customers, I always found it easier to handle even difficult customers, if I could empathise with him or make him empathise with me. I will narrate some instances 1. State Bank of Travancore (SBT) opened a double shift branch in Besant Nagar Chennai in 1981.  The premises was situated in the road facing the beach. Within 500 metres, there was a branch of State Bank of India (SBI) inside the residential area. Getting customers into our books was an uphill task.  It was quite common for all of us to stand outside the gate of the premises, so that any walkers to the beach can be met for opening accounts. One day around 6 pm, it was raining heavily and all the staff were in...