Mumbai June 14 (IANS) The Reserve Bank of India (RBI) has initiated prompt corrective action (PCA) on state-run lender Central Bank of India in the view of its high non-performing assets (NPAs) and negative return on assets (RoAs).
RBI vide the letter dated June 13 2017 has put the bank under Prompt Corrective Action in view of high net NPA and negative RoA the Central Bank of India said in a regulatory filing to the BSE.
We believe that corrective measures arising out of the PCA will help in improving overall performance of the bank.
The development follows the April 13 2017 revision of the PCA guidelines by the RBI.
In April the RBI said that capital asset quality and profitability would be the basis for the PCA framework on which the banks would be monitored and has defined three kinds of risk thresholds.
In a notification issued that time the RBI said mandatory action to be taken when a bank breaches the risk threshold includes restriction on dividend payment remittance of profits restriction on branch expansion higher provisions restriction on management compensation and director s fees.
The PCA framework would apply without exception to all banks operating in India including small banks and foreign banks operating through branches or subsidiaries based on breach of risk thresholds of identified indicators the RBI had said.
--IANS
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RBI initiates PCA against Central Bank of India
