RBI initiated PCA on Bank of India and United Bank of India
The Reserve Bank of India cracked the whip on two state-run banks initiating Prompt Corrective Action (PCA) on Bank of India (BoI) and United Bank of India (UBI).With this, the RBI has put at least 10 lenders under the scanner, imposing restrictions on lenders including issuing of fresh loans and dividend distribution.
According to BoI, RBI’s action comes after its on-site inspection under the risk-based supervision model carried out for the year ended March 2017. This is in view of high net NPA, insufficient CET1 Capital and negative ROA (return on asset) for two consequent years. This action will contribute to the overall improvement in risk management, asset quality, profitability, efficiency etc of the bank.
Under the PCA framework, RBI asked the bank to take action on areas like profit retention, capital augmentation, provision coverage, diversification of credit portfolio, rationalization of expansion and cost control.
Bank of India:
Founded in: 1906
MD & CEO: Dinbandhu Mohapatra
United Bank of India:
MD & CEO: Pawan Kumar Bajaj
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