Curbs on Allahabad Bank, CEO divested of powers

RBI initiates prompt corrective action against Dena Bank due to mounting NPAs

RBI initiates prompt corrective action against Dena Bank due to mounting NPAs

Dena Bank was already under the RBI's prompt corrective action framework since June previous year, and the fresh restrictions sent the stock tumbling over 12 per cent on Monday.

While the bank did not specify the reason behind the RBI's directive, the strictures are likely part of the RBI's prompt corrective action (PCA) framework. As part of this move, Dena Bank has now been barred from taking fresh credit exposure and also recruitment of staff.

The net loss stood at Rs 575.26 crore in the January-March quarter of 2016-17.

Last week, Allahabad Bank reported a standalone net loss of Rs3,509.63cr for Q4FY18 led by more than three-time rise in its provisions for bad loans.

Ananthasubramanian has been named in a Central Bureau of Investigation (CBI) charge-sheet in connection with the alleged Rs 13,500 crore fraud at the Punjab National Bank.

Its return on assets became negative at (-) 5.77 per cent at the end of March quarter as against 0.19 per cent a year ago.


Prompt Corrective Action framework is a measure/tool to maintain the sound financial health of banks, which involves monitoring of certain performance indicators of the banks as an early warning exercise.

The RBI is expected to take similar action against four more banks now under its PCA framework - Bank of Maharashtra, Oriental Bank of Commerce, Allahabad Bank and UCO Bank - as their financial profiles continue to be in bad shape, reports Business Standard.

Provisions for bad loans dropped 3.7 percent sequentially (down 10 percent year-on-year) to Rs 148.6 crore in fourth quarter of financial year 2017-18.

"The problem is very serious, it has been growing for two quarters at least, particularly since October and therefore, there is concern".

He further said the banks which are out of the PCA ambit have a crucial role to play in the economy.

The mounting losses and the RBI restrictions under the PCA watchlist will curtail banks' ability to lend, which in turn will create problems in terms of financing investments, he added.

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