Bank of Maharashtra shares down nearly 4% on RBI's PAC action

RBI has initiated PAC against the bank because of its mounting bad loans

Shares of Bank of Maharashtra (BoM) on Monday fell nearly 4 per cent as the Reserve Bank of India (RBI) has initiated Prompt Corrective Action (PAC) against the company in view of a high level of bad loans and negative return on assets.

The stock went down by 3.40 per cent to close at Rs 29.80 on BSE. During the day, it slumped 4.37 per cent to Rs 29.50.

At NSE, shares of the company dipped 3.70 per cent to close at Rs 29.85.

BoM has become the sixth state-owned lender to be put under the PCA.

This is to inform that the Reserve Bank of India letter dated June 15, 2017, has initiated PCA for the bank in view of high net NPA, BoM said in a regulatory filing on stock exchanges on Saturday.

"This action will not have any material impact on [the] performance of the bank and will contribute to improve the internal controls of the bank and improvement of its asset quality, profitability and efficiency," it said.

For the year ended March 2017, the net non-performing assets (NPAs) of the bank rose to 11.76 per cent, while return on assets declined to (-) 1.09 per cent.

At the same time, the bank reported a loss of Rs 455.4 crore for the fourth quarter, while for entire fiscal 2016-17 booked loss of Rs 1,372 crore.