Oriental Bank put under central bank's corrective action over bad loans

Oriental Bank of Commerce Ltd, a mid-sized Indian state-run lender, said the nation's central bank has initiated "prompt corrective action" against the bank over its high amount of net non-performing assets (NPA).

Oriental Bank is the seventh state-run lender to be put under a corrective action plan, which requires a bank to enact curbs on hiring, branch expansion and taking on new loans.

"This action will not have any material impact on the performance of the bank and will contribute in an overall improvement in its risk management, asset quality, profitability and efficiency," the lender said in a stock exchange filing late on Saturday.

The bank posted a net loss for the June quarter, with net NPA rising to 9.56 per cent.