Contact Your Financial Adviser Money Making MC
10 May 2017
State-owned
lender IDBI Bank on Tuesday evening said that Reserve Bank of India (RBI) has
initiated a "prompt corrective action" (PCA) Ain view of its high
non-performing assets (NPAs) and negative return on assets (RoAs). The Total Investment & Insurance Solutions
"RBI,
vide their letter dated May 05, 2017, has initiated PCA for IDBI Bank in view
of high NPA and negative RoA," IDBI Bank in a regulatory filing to the
BSE.
"This
action will not have any material impact on the performance of the bank and
will contribute to improving the internal controls of the bank and improvement
in its activity."
The
development follows April 13, 2017 revision of the PCA guidelines by RBI.
Last
month, RBI said that capital, asset quality and profitability would be the
basis of the PCA framework on which the banks would be monitored and has
defined three kinds of risk thresholds. The
Total Investment & Insurance Solutions
In
a notification issued by RBI that time, the mandatory action that would be
taken when a bank breaches the risk threshold includes restriction on dividend
payment/remittance of profits, restriction on branch expansion, higher
provisions, restriction on management compensation and director's fees. The Total Investment & Insurance Solutions
"The
PCA framework would apply without exception to all banks operating in India
including small banks and foreign banks operating through branches or
subsidiaries based on breach of risk thresholds of identified indicators,"
the RBI had said.
With
regard to credit risk related action, the RBI can ask the banks to prepare a
time bound plan and commitment for reduction of NPAs; restrict or reduce credit
expansion for borrowers below certain rating grades or unrated
borrowers/unsecured exposures/loan/concentration of loans in identified sectors
or borrowers. The Total Investment & Insurance
Solutions
The
bank had posted a net loss of Rs 2,254.96 crore for the quarter ended December
31, 2016, as compared to net loss of Rs 2,183.68 crore for the quarter ended
December 31, 2015.The Total Investment & Insurance
Solutions
No comments:
Post a Comment