"This is in view of high net NPA, insufficient CET1 Capital and negative ROA (return on asset) for two consequent years. This action will contribute to the overall improvement in risk management, asset quality, profitability, efficiency, etc of the bank," BoI said.
At the end of March 2017, the bank's asset quality worsened with gross non performing assets (NPAs) at 13.22 per cent, as against 13.07 per cent in the previous year. Net NPAs, however, improved to 6.90 per cent from 7.79 per cent.
For the second quarter ended September, 2017-18, asset quality improved as gross NPAs declined marginally to 12.62 per cent of gross advances, from 13.45 per cent a year ago.
Net NPAs also improved to 6.47 per cent of net advances for the period under review, down from 7.56 per cent a year ago.
In absolute terms, gross NPAs stood at Rs 49,306.90 crore as on September 2017, from Rs 52,261.95 crore earlier.
The RBI has initiated similar action against other public sector banks including IDBI Bank, Indian Overseas Bank and UCO Bank.
The Reserve Bank in April had issued a new set of enabling provisions under the revised PCA framework with a clause that if the bank does not show improvement then it could be either be merged or taken over by other bank.
The BoI stock was trading at Rs 174.50, down 3.78 per cent on BSE.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)
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