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    PNB, Andhra Bank could be next on RBI's PCA framework: Credit Suisse

    Synopsis

    As many as 11 of the 21 PSU banks are currently under the PCA framework.

    Bank-
    As many as 11 of the 21 PSU banks are currently under the PCA framework.
    NEW DELHI: Stressed banks PNB and Andhra Bank could be next on RBI's prompt corrective action (PCA) framework, foreign brokerage Credit Suisse said in a note. Under the framework, RBI lays down stricter guidelines for the lenders to meet regulatory capital requirements.

    As many as 11 of the 21 PSU banks are currently under the PCA framework. With net non-performing assets of over 8 per cent and common equity tier (CET) levels down to 6 per cent, PNB and Andhra Bank look like candidates to be added to the PCA framework, Credit Suisse said in a note.

    If the lenders were to be added to the PCA framework, share of loans under PCA will likely increase to 26 per cent from 19 per cent currently.

    "PSU banks under PCA have seen loans contract YoY, while non-PCA PSU banks have seen a 10 per cent YoY growth in loans. With RBI putting sanctions on further loan growth for Dena and Allahabad, loan growth for PCA banks is likely to contract further," the brokerage said.

    PCA

    Punjab National Bank reported a net loss of Rs 13,416.91 crore for the quarter ended March 31, as provisions surged four times. The lender said it made provisions and contingencies worth Rs 20,353.10 crore for the quarter ended March.


    Gross non-performing assets (NPAs) as percentage of total advances spiked to 18.38 per cent in the fourth quarter from 12.11 per cent in the third quarter and 12.53 per cent in the year-ago quarter.

    Andhra Bank, on the other hand, reported a standalone net loss of Rs 2,535.82 crore for the quarter, mainly due to higher non-performing assets. The banks gross NPA widened to 17.09 per cent of total assets as compared to 12.25 per cent in the corresponding quarter last year.




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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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