"This action will contribute to the overall improvement in risk management, asset quality, profitability, efficiency of the bank."
Last week, PCA was initiated against state-run lender Corporation Bank.
Earlier, PCA was enforced on Bank of Maharashtra, Central Bank of India, IDBI Bank, Indian Overseas Bank, UCO Bank and Dena Bank.
In April, the RBI said that capital, asset quality and profitability would be the basis for the PCA framework on which the banks would be monitored and has defined three kinds of risk thresholds.
In a notification issued then, the RBI said mandatory action to be taken when a bank breaches the risk threshold includes restriction on dividend payment, remittance of profits, restriction on branch expansion, higher provisions, restriction on management compensation and director's fees.
"The PCA framework would apply without exception to all banks operating in India, including small banks and foreign banks operating through branches or subsidiaries based on breach of risk thresholds of identified indicators," the RBI had said.
In addition, the RBI 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 or unrated borrowers, unsecured exposures, loan, concentration of loans in identified sectors or borrowers.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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