The Reserve Bank of India (RBI), the central bank of the country, has restricted state-run lender Dena Bank from issuing fresh credit due to growing non-performing assets (NPA).

The central bank has also barred Dena Bank to recruit new personnel.

In a regulatory filing, Dena Bank stated that the RBI had initiated Prompt Corrective Action on it and has imposed certain restrictions due to high Net NPA and negative RoA.

Accordingly, now the bank can disburse already sanctioned loans but cannot issue new ones.

Dena Bank was put under the prompt corrective action (PCA) framework in May last year, which prevented the bank from disbursing dividends.

As the financial conditions of the bank did not improve in the last one year, RBI has directed Dena Bank to stop lending and recruiting process.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

These decisions are part of the PCA framework, reported The Hindu.

Currently, multiple banks are under PCA framework, but Dena Bank is the first financial institution to have its fresh lending barred.

In the quarter of January to March 2018, Dena Bank posted a loss of INR12.25bn ($181.8m), compared to INR5.75bn in the same period a year earlier.

Following the announcement, the shares of Dena Bank fell by more than 12%.