NEW DELHI (TIP): The RBI has initiated a ‘prompt corrective action’ against Bank of India for mounting bad loans, placing various restrictions on it including issuing of fresh loans and dividend distribution, BoI said today.

In a filing to stock exchanges, BoI said RBI has placed it under Prompt Corrective Action Framework, consequent to the onsite 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,” BoI said.

At the end of March 2017, the bank’s asset quality worsened with gross non-performing assets (NPAs) at 13.22%, as against 13.07% in the previous year. Net NPAs, however, improved to 6.90% from 7.79%.

For the second quarter ended September, 2017-18, asset quality improved as gross NPAs declined marginally to 12.62% of gross advances, from 13.45% a year ago.

In absolute terms, gross NPAs stood at Rs 49,306.90 crore as on September 2017, from Rs 52,261.95 crore earlier.

Source: PTI