RBI puts deposit, lending restrictions on Allahabad Bank asks Bank board to divest CEO Usha Ananthasubramanian of all powers

RBI, Allahabad Bank

RBI, Allahabad Bank

RBI puts deposit, lending restrictions on Allahabad Bank asks Bank board to divest CEO Usha Ananthasubramanian of all powers

State-run Allahabad Bank today said the Reserve Bank has imposed restrictions on its lending to risky assets and raising high-cost deposits in view of deteriorating financial health. The directive has come within days of the RBI imposing similar restrictions on another state-run lender Dena Bank, which is under the Prompt Corrective Action (PCA) of the central bank. The RBI having regard to the banks CRAR and leverage ratio position has advised certain additional actions, Allahabad Bank said in a filing on stock exchanges. The central bank asked Allahabad Bank, which is already under the PCA mechanism, to restrict expansion of risk weighted average and reduce exposure to UN-rated and high-risk advances, the filing said. Meanwhile, the government today said it has initiated action for removal of Allahabad Bank CEO Usha Ananthasubramanian following the CBI’s first charge sheet in the USD 2 billion fraud at PNB detailing her role. Action is likely to be taken by the board of Allahabad Bank against its CEO and MD Ananthasubramanian, who was the managing director of PNB till May 5 last year. Last week, Allahabad Bank reported a standalone net loss of Rs 3,509.63 crore for the last quarter ended March of 2017-18 due to more than three-time rise in its provisions for bad loans. The bank had registered a net profit of Rs 111.16 crore in the same quarter of preceding fiscal 2016-17. The bank had reported a loss of Rs 1,263.79 crore in the previous December quarter.

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