RBI has initiated PCA against Bank of India over high Bad Loans

Bank of India said on Wednesday that the Reserve Bank of India has initiated ‘prompt corrective action’ (PCA) against the lender over high bad loans.

High net non-performing assets (NPA), insufficient common equity tier 1 (CET1) capital and negative return on assets (ROA) for two consecutive years has prompted the action, the bank said in a statement.

The RBI issues a PCA to spur lenders to deal with bad debts, as one of the measures intended to tackle the menace of bad debt that has plagued Indian banks.

The bank had a net non-performing assets ratio of 6.47 percent as of end-September.

Shares of the bank dropped as much as 5.4 percent to 171.45 rupees in afternoon trade in a Mumbai market that was trading 0.17 percent higher.

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