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RBI puts Allahabad Bank under prompt corrective action

The RBI inspection has revealed high net NPAs and negative ROA for two consecutive years

Press Trust of India  |  New Delhi 

Allahabad Bank gains most from revaluation of realty assets among eastern banks

Public sector today said the Reserve Bank has put the lender under framework post an on-site inspection of high NPAs and negative return of assets for fiscal 2016-17.

"We have to inform you that the Reserve Bank of India vide letter dated January 2, 2018 received by the bank on date has placed the bank under Framework, consequent to the on-site inspection under the Risk Based Supervision Model carried out for the year ended March, 2017," the bank said in a regulatory filing.

The inspection has revealed high net NPAs (non performing assets) and negative ROA (return on assets) for two consecutive years, it said further.

"The action will contribute to the overall improvement in risk management, asset quality, profitability, efficiency of the bank," the lender said.

For the fiscal 2016-17, the bank had trimmed its net losses to Rs 3.13 billion against Rs 7.43 billion in 2015-16.

The has initiated similar action against other public sector banks, including IDBI Bank, Indian Overseas Bank and UCO Bank.

The in April had issued a new set of enabling provisions under the revised PCA framework with a clause that if the bank does not show improvement then it could be either be merged or taken over by other bank.

Shares of closed at Rs 72.35 apiece, up 0.28 per cent on BSE.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Wed, January 03 2018. 22:30 IST