In a filing to stock exchanges, BoI said Reserve Bank of India has placed it under Prompt Corrective Action Framework, consequent to the onsite inspection under the risk based supervision model carried out for the year ended March 2017.
"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.
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.
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In absolute terms, gross NPAs stood at Rs 49,306.90 crore as on September 2017, from Rs 52,261.95 crore earlier.
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.