RBI begins prompt corrective action against Bank of India; shares dip 5%

BoI had a net non-performing assets ratio of 6.47% as of end-September

Bank of India said on Wednesday that the Reserve Bank of India has initiated 'prompt corrective action' (PCA) against the lender over high bad loans.

High net non-performing assets (NPA), insufficient common equity tier 1 (CET1) capital and negative return on assets (ROA) for two consecutive years have prompted the action, the bank said in a statement.

The RBI issues a PCA to spur lenders to deal with bad debts, as one of the measures intended to tackle the menace of bad debt that has plagued Indian banks.

The bank had a net non-performing assets ratio of 6.47 per cent as of end-September. 

Shares of the bank dropped as much as 5.4 per cent to 171.45 rupees in afternoon trade in a Mumbai market that was trading 0.17 per cent higher.