State-run Allahabad Bank on Monday said that the Reserve Bank of India has advised certain addition actions against the lender in view of its capital adequacy and leverage ratio position, after the apex bank had imposed prompt corrective action (PCA) on it.
Incidentally, the Department of Financial Services (DFS) asked the government representative in the Allahabad Bank to come up with a proposal before the board to strip powers of its MD and CEO Usha Ananthasubramanian after the CBI earlieron Monday filed a chargesheet in the over Rs 13,000-crore Punjab National Bank (PNB) scam.
Ananthasubramanian, who was the MD and CEO of PNB from August 2015 to May 2017, was quizzed by the Central Bureau of Investigation (CBI) in February in the PNB fraud.
In a regulatory filing on Monday, the lender said: "...the Reserve Bank of India, having regard to the Bank's CRAR and Leverage Ratio position, has advised certain additional actions."
The apex bank asked the lender to restrict expansion of risk weighted assets, reduce exposure to un-rated and high-risk advances, restrict creation of non-banking assets, restrict accessing/renewing wholesale/costly deposits/certificate of deposits.
The lender posted a net loss of Rs 3,509.63 crore in the quarter ended March 31 due to increase in provisioning for non-performing assets and reduction in total income.
It also reported that its gross non-performing assets went up to Rs 26,562.79 crore as on March 31, up by 28% from Rs 20,687.83 crore a year ago.
Gross NPAs as a percentage of total advances stood at 15.96 per cent at the end of March quarter compared with 13.09 per cent in same period last year.
Its net NPAs were Rs 12,229.13 crore at the end of this quarter under review, as against Rs 13,433.51 crore as on March 31, 2017.
The Reserve Bank of India had imposed prompt corrective action (PCA) on the lender in January due to high NPAs and negative return on assets (RoA) for two consecutive years.
The city-headquartered bank said that the PCA framework was initiated consequent to the onsite inspection under risk-based supervision model (of RBI) carried out for the year ended March 31, 2017.
The lender, however, recently said its provision coverage ratio (PCR)improved to 62.91% in FY 2017-18, up from 50.11 per cent in FY 2016-17.Its return on assets became negative at (-) 5.77% at the end of March quarter as against 0.19% a year ago.