RBI prescribed certain additional actions under the PCA in view of high net NPAs.
After Bank of India, Reserve Bank of India on Tuesday imposed additional restrictions on United Bank of India under the Prompt Corrective Action (PCA) framework given the high stress levels owing to the bank’s high bad loans.
“The action points focus on profit retention, capital augmentation, provision coverage, diversification of credit portfolio, rationalisation of expansion and cost control,” UBI said Wednesday said in its disclosure filing to stock exchanges.
It said that the RBI, in a letter dated December 19, has prescribed certain additional actions under the PCA in view of high net NPAs or non-performing assets, low leverage ratio and requirement to raise capital based on the assessment of the bank’s position as on March 31, 2017.
Bank of India is the ninth lender placed under Prompt Corrective Action Framework by the RBI after Corporation Bank, Oriental Bank of Commerce, UCO Bank, Central bank of India, IDBI bank, Dena Bank, United Bank of India and Bank of Maharashtra.