RBI action to impact growth of Bank of India

Though gross non-performing assets ratio has been declining in recent quarters, it is still one of the highest among peers

The Bank of India (BOI) stock shed five per cent after the Reserve Bank of India (RBI) placed the bank under the Prompt Corrective Action (PCA) list. Inclusion in the PCA is initiated if any bank breaches thresholds, which in case of Bank of India was insufficient core equity capital, high net non-performing assets (bad loans or NPAs) and negative return on assets for two consecutive years. The move follows RBI’s onsite inspection based on its risk-based supervision model for FY17.

While the bank’s high NPA ratio and negative return on assets in last two years were known, its common