The Dena Bank stock closed lower today amid report that the Reserve Bank has initiated prompt corrective action (PCA) against the public sector lender considering high non-performing loans, restricting the bank from giving fresh credit and new hiring. The stock closed 5.96% or 1.10 points lower at 17.35 level on BSE. It opened at 18.30 level and hit an intra day low of 16.15.
The public sector lender has reported widening of its Q4 net loss to Rs 1,225.42 crore on mounting bad loans and higher provisioning to cover them. The net loss stood at Rs 575.26 crore in the January-March quarter of 2016-17.
Sequentially, the loss widened from Rs 380.07 crore in December quarter of 2017-18.
"Reserve Bank of India, vide their letter dated May 31, 2017, has initiated Prompt Corrective Action for Dena Bank and imposed certain restrictions, in view of high Net NPA and negative RoA ( return on assets)," the bank said in a regulatory filing.
In continuation to the above, "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," it said further.
The bank's asset quality has worsened with the gross NPAs hitting a high of 22.4 per cent of the gross advances as on March 31, 2018, from 16.27 per cent as of end-March 2017.
In value terms, the gross NPAs or bad loans rose to Rs 16,361.44 crore from Rs 12,618.73 crore.