RBI Initiates prompt corrective action against Dena Bank. Reserve Bank of India has take this action because of the large debt trap situation. Under the Prompt Corrective action, RBI Bans the bank from offering new loans to its customer. Moreover, It also stops the Bank to recruit any further employee right now. On Saturday, Dena Bank informs that due to more Standard Debt i.e. NPA, its loss increases up to Rs 1225.42 in the March Quarter. Moreover, the net loss the bank face in January-March quarter of 2016-17 was Rs 575.26 crores.
Reason Why RBI Initiates Prompt Corrective Action Against Dena Bank?
Earlier in October-December Quarter of the year 2017-18, the bank losses Rs 380.07 crores. In an information given to the Stock Exchange, the bank says RBI initiates prompt corrective action against us because of the higher net NPAs and Negative return on the Loans or Assets. Moreover, they also impose some restrictions on us.
When does RBI notify Dena Bank?
On May 7, 2018, In this regard, RBI sent a letter to the Bank. In this letter, RBI bans the bank to offer new loans to its customer and Recruit any new employee. However, Officials from Dena Banks says this letter is already presented in front the Board of Directors of the Bank.
Let me tell you that, Earlier, RBI Initiates this action against several other banks. Examples are Allahabad Bank, IDBI Bank, Indian Overseas Bank & UCO Bank.
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