Reserve Bank of India on Friday initiated Prompt Corrective Action (PCA) for Dena Bank over high value of non-performing assets (NPAs) and negative return on assets (RoA).
"The RBI, through its letter dated May 31, has initiated Prompt Corrective Action for Dena Bank in view of high Net NPA and negative RoA," the public sector bank said in a BSE filing in Mumbai.
RBI authority under Prompt Corrective Action (PCA)
Reserve Bank of India 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.
Dena Bank on the other hand has maintained that the decision will not affect banks performace and will have a positive impact on the internal controls and activities.
The development follows revision of the PCA guidelines by the RBI on April 13.
(with IANS inputs)