Current Affairs

RBI Puts Dena Bank under PCA (Prompt Corrective Action)

Reserve Bank has initiated prompt corrective action against public sector lender Dena Bank.
It has restricted the bank from giving fresh credit and new hiring.
RBI Puts Dena Bank under PCA (Prompt Corrective Action)
  • Dena Bank reported a further widening of its loss to Rs 1,225.4 crore in the March-ended quarter due to increasing bad loans.
  • Bank's asset quality has worsened with the gross NPAs increasing to 22.4% of the gross advances 
  • Net NPAs also increased from 10.66% to 11.95%.
  • The RBI has initiated similar action against other public sector banks, including IDBI Bank, Indian Overseas Bank and UCO Bank before this. 
  • RBI had last year also initiated Prompt Corrective Action for Dena Bank and imposed certain restrictions on the bank.
  • In April 2017, the RBI had issued a new set of enabling provisions under the revised PCA framework.
  • The revised framework comes with a clause that if the bank does not show improvement then it could be either be merged or be taken over by other bank.

Expected Questions

Question 1. Name the framework introduced by the RBI to regulate banks’ NPAs
PCA (Prompt Corruptive Action)

Question 2. PCA frameworks all the banks operating in India except?

Question 3. Which was the 1st bank to come under the PCA framework?

Question 4. The loan is considered to be a NPA if the borrower fails to repay for how much duration?
90 days

Question 5. Who is the Chairman and MD of Dena Bank?

Ashwani Kumar

Question 6. Who is the current Governor of RBI?

Urjit Patel
RBI Puts Dena Bank under PCA (Prompt Corrective Action) RBI Puts Dena Bank under PCA (Prompt Corrective Action) Reviewed by Shweta Kashyap on May 14, 2018 Rating: 5

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