RBI puts Dena Bank under prompt corrective action – No lending or Fresh Recruitment

RBI puts Dena Bank under prompt corrective action - No lending or Fresh Recruitment

RBI puts Dena Bank under prompt corrective action

RBI puts Dena Bank under prompt corrective action

RBI puts Dena Bank under prompt corrective action due to high Non Performing loans, restricting the bank from giving fresh lending. Dena Bank will not be able to do any fresh Hiring due to constant widening of losses. As per the latest report, Net loss of 1225.42 Crore was seen in March Quarter. In January – March quarter of 2016-17, a total Net loss of 575.26 Crores was seen. Subsequently, loss widened from 380.07 Crores in December quarter of 2017-18.

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Dena Bank under prompt corrective action

  • RBI Imposed restriction on Dena Bank in view of high net NPA & Negative Return of Investment.
  • Further, RBI Officials said that “we wish to inform that the RBI vide their letter dated May 07, 2018 (received by the Bank on May 08, 2018) has restricted the Bank from assuming fresh credit exposure and recruitment of staff”.
  • As per Dena Bank Officials, It was put up to the Board in it’s meeting held on 11th May 2018.
  • Assets quality is worsening day by day with gross NPAs hitting a high of 22.4% of gross advances as on 31st March 2018 from 16.27 % as of end – March 2017.
  • In value, Gross NPAs or Bad Loans have increased to 16,361.44 crores from 12,618.73 Crores.
  • Net NPA also rose up at 11.95% (7,838.78 Crore) from 10.66% (7,735.12 Crores).

In April 2017, RBI had issued new set of enabling provisions under the revised PCA Framework with a clause that if the Bank Doesn’t show any further improvement, It could either be merged or taken over by other Bank.

In January 2018, Allahabad Bank declared that RBI has put them under RBI’s PCA mechanism. It took similar action against many other Public sector Banks such as; IDBI Bank, Indian Overseas Bank, & UCO Bank under RBI’s PCA mechanism.

Effect of RBI Corrective action on Dena bank Recruitment

  • After RBI puts Dena Bank under prompt corrective action, Dena Bank will not be allowed to recruit in the financial year 2018-19 until the Bank shows any further improvement.
  • All the published Recruitments scheduled to be conducted in 2018 will be cancelled/ Postponed until any improvement in NPAs.

  • The Dena Bank PO 2018 exam which is scheduled to be held on 2nd June 2018 will likely be cancelled due to RBI corrective actions.

ALL THE BEST!!!!

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