Shares of Bank of India fell by almost 4 per cent today after the RBI initiated a 'prompt corrective action' against the lender for mounting bad loans, placing various restrictions on it including issuing of fresh loans and dividend distribution.
The stock slipped 3.94 per cent to settle at Rs 174.20 on BSE. During the day, it dived 5.32 per cent to Rs 171.70.
On NSE, shares of the bank fell 3.94 per cent to close at Rs 174.10.
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In terms of equity volume, 4.57 lakh shares of the company were traded on BSE and over 44 lakh shares changed hands on NSE during the day.
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.
At the end of March 2017, the bank's asset quality worsened with gross non performing assets (NPAs) at 13.22 per cent, as against 13.07 per cent in the previous year. Net NPAs, however, improved to 6.90 per cent from 7.79 per cent.
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.
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