RBI Begins ‘Corrective Action’ Against Oriental Bank of Commerce

Published on October 09, 2017
The Reserve Bank of India (RBI) has imposed a ‘prompt corrective action’ against state-owned Oriental Bank of Commerce.

  • The action is taken for high bad loans.
  • Various restrictions on the public sector lender including on fresh loans and dividend distribution will be placed.
  • Net NPA of the bank rose to 9.56% of net advances as of June against 8.11% a year ago.
  • The RBI took similar action against IDBI Bank, Indian Overseas Bank and UCO Bank.

What is Prompt Corrective Action?

Reserve Bank of India (RBI) has issued a policy action (first in May 2014 and revised effective from April 1, 2017) in the form of prompt corrective action (PCA) framework. When a bank have low capital adequacy or high Non- performing assets, which are specified as trigger point; in such case, RBI takes a corrective action. ..
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