The goal of the exercise will be to help understand the ten-year performance (wherever data is available) of banks on which the Reserve Bank has imposed the PCA. The reason for examining the performance of these banks over a long time period is to appreciate the fact that the progress of banks under PCA cannot be judged over a relatively short time scale.
The longer the under-capitalisation and asset quality problems have festered, the more patient one has to be during the rehabilitation process. There is no quick fix or overnight silver bullet here; the reforms have to be implemented and allowed to run their course; they can’t be chopped or diluted mid-stream; the focus has to be on stability that is durable.