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Allahabad Bank put on prompt corrective action by RBI

Author: IANS/Friday, January 5, 2018/Categories: Banking & Financial Services

Allahabad Bank put on prompt corrective action by RBI

Kolkata - State-run Allahabad Bank became the new entrant of the league of ten other public sector banks where the Reserve Bank of India imposed prompt corrective action (PCA) due to high non-performing assets (NPA) and negative return on assets (RoA) for two consecutive years.

The city-headquartered bank said that the PCA framework was initiated consequent to the onsite inspection under risk based supervision model (of RBI) carried out for the year ended March 31, 2017.

"The RBI inspection has revealed high net NPA and negative RoA for two consecutive years," the bank said in a regulatory filing.

Allahabad Bank had recorded a net NPA of 8.92% for the year ended March 31, 2017. The return on assets was negative 0.13% and negative 0.33% in 2016-17 and 2015-16 respectively.

Among ten other public sector banks, against which the corrective action was initiated, were the IDBI Bank, Bank of India, Bank of Maharashtra, Central Bank of India, Dena Bank, Indian Overseas Bank, United Bank of India, Oriental Bank of Commerce, Corporation Bank and UCO Bank.

"This action (PCA) will contribute to the overall improvement in risk management, asset quality, profitability, efficiency etc. of the bank," the lender added.

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