RBI begins PCA against Allahabad Bank

The Reserve Bank of India (RBI) has initiated prompt corrective action (PCA) against public sector lender Allahabad Bank, owing to its high net non-performing assets (NPAs) and negative return on assets (RoA) for two consecutive years.

While in 2016-17, the bank’s net NPA ratio stood at 8.92 per cent and the annualised RoA at -0.13 per cent, in 2015-16 the net NPA was 6.76 per cent and RoA was -0.33 per cent.

At least half the listed state-owned lenders have now been put under corrective action including BoI, IOB, United Bank of India, Corporation Bank, OBC, Dena Bank, Central Bank, IDBI Bank and Bank of Maharashtra.

“… (RBI) vide their letter dated January 2, 2018 received by the bank on date has placed the bank under prompt corrective action (PCA) framework, consequent to the onsite inspection under the risk-based supervision model carried out for the year ended March 2017 and the report issued thereof,” the bank said in a regulatory filing. #casansaar (Source - Financial Express, Indian Express)