The Reserve Bank of India (RBI) has restricted state-run lender Allahabad Bank from lending to risky assets and raising high-cost deposits amid its worsening financial health.
The Kolkata-headquartered bank was also ordered to cut exposure to unrated and high-risk advances, to restrict creation of non-banking assets and to avoid accessing/renewing wholesale/costly deposits.
Go deeper with GlobalData
Earlier in January, the RBI put the lender under the prompt corrective action (PCA) due to high net NPAs and negative return on assets.
A lender placed under NPA avoids branch expansion and narrows its lending to relatively less risky segments to return to good health.
The RBI order comes at a time when the bank’s common equity tier-1 (core capital) breached the minimum regulatory requirement of 7.37% in March 2018.
Very recently, Dena Bank, which is also under PCA, said that RBI has the bank from issuing fresh credit due to growing non-performing assets (NPA).
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.
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 GlobalDataMeanwhile, the government has started process to remove Allahabad Bank CEO Usha Ananthasubramanian after the CBI filed its first charge-sheet in the $2bn fraud at PNB.
