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MUMBAI: Central Bank of India, a state-owned commercial bank, plans to shut 13% of its branches to improve its financial health, which has been under pressure for several years, according to sources and a document seen by Reuters.

The bank is looking to reduce the number of branches by 600 by either shutting down or merging loss-making branches by the end of March 2023, according to the copy of a document reviewed by Reuters.

It is the most drastic step the lender has taken to improve its finances and will be followed by the sale of non-core assets such as real estate, said a government source who did not want to be named.

The closure of the branches has not been reported previously. The more than 100-year old lender currently has a network of 4,594 branches.

Central Bank along with a clutch of other lenders was placed under RBI’s prompt corrective action (PCA) in 2017 after the regulator found some state-run lenders were in breach of its rules on regulatory capital, bad loans and leverage ratios.

Since then all the lenders except Central Bank have improved their financial health and come off RBI’s PCA list.

“The bank is struggling to come out of PCA of RBI due to poor performance on profit since 2017 and to utilise manpower in more efficient and effective manner,” the document dated May 4 sent out by the headquarters to other branches and departments stated, detailing the rationale behind the move.

Central Bank of India did not immediately reply to emails and calls seeking comment.

A bank under PCA faces greater scrutiny by the regulator and may face lending and deposit restrictions, branch expansion and hiring freezes and other limitations on borrowings.

The RBI introduced these norms at a time when Indian lenders were battling record levels of soured assets, prompting the RBI to tighten thresholds.

“Central bank of India’s move is in line with the set strategy of lowering loss-making assets in its books,” the government official said.

In the December quarter, the lender reported a profit of 2.82 billion Indian rupees ($37.1 million) versus 1.66 billion rupees in the previous year in the same quarter.

It gross non-performing assets (GNPA) ratio remains high compared with its peers however, standing at 15.16% as of the end of December.

The bank was placed under the PCA framework in June 2017 and in that quarter the lender had registered a loss of 7.50 billion rupees while its GNPA ratio was at 17.27%.

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samir sardana May 08, 2022 12:20am
The Role of the RBI -- Part 1 The Job of the RBI is NOT to maintain price stability or peg the rupee or print the INR.With 400 Billion USD anyone can peg the INR to anywhere they want.The Purpose of the RBI is to protect the Robbers & Barons of India (RBI), id.,est., Banias,Brahmins etc.,to enable them to loot the Indian People,on the pretext of new business ventures,to keep the wheels of commerce moving,& thus,ensure,a pittance of jobs & excess production capacities. There is no agri policy in India – except to ensure the disaster of over production,to depress agri farm gate prices, which is to ensure that the input costs for the Robbers & Barons of India ,& the food costs of the middle classes,are as low as possible – at the cost of the misery,pain & blood of millions of farmers. Since the Robbers & Barons of India,being bania & brahmins, are INHERENTLY incompetent,they need various subsidies & protection in form of import duties & tax sops & FREE LOANS.dindooohindoo
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samir sardana May 08, 2022 12:28am
The Role of the RBI -- Part 2 How does the RBI protect the Robbers & Barons (Banias).Indian Banking system is not commercial banking.It is a VC enterprise,which lends to ultra-high risk activities ,id.est FRAUD. Let us say Mr A starts a business B & then takes a bank loan from a Private Bank Say HDFC bank – & then steals the money.Then what ? Then The RBI gives him the key to the door of a lower tier Private Bank,like Axis Bank – say,for working capital funding (after sinking the term loan – by diversion & over- invoicing). A eats up this cash also ! Then A goes to a 2nd tier state owned bank – but by now his name is flashed ONLY In the banking system.So he floats a new trading cum manufacturing company called D,& starts the entire process again. Then he targets the STCIL,MMMTC,MSTC & PEC to get merchant financing for transactions, as a trader /associate & rips them off . Then Mr A moves to the last tier of the Indian Banks,which is the Cooperative banks & Societies.dindooohindoo
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samir sardana May 08, 2022 12:33am
The Role of the RBI -- Part 3 All these Banks & other agencies,have more than Rs 1500000 crores of such OUTRIGHT FRAUDS & Mr A has positioned him at a scale & a type of fraud which is far less than the rest & so,Mr A is NOT a Priority for the bank or the legal system.Now Mr A has to be creative.So he taps his trusted suppliers & other participants in the supply & value chain of Business B & D, to raise working capital loans from new banks, So Mr A is a seed VC, who has tried & tested the banking system, & placed his confidants in a position to loot money – who will follow SOPs of Mr A Now Mr A has invested the stolen 1 Billion USD, in land or gold or stocks & in 10 years, it is worth say USD 3-5 billion, & he now wants to “get back in the gane”.So what does he do ? He dials the banker & asks for a CDR/OTS,& the banker thinks that an angel has descended from the pole star.The entire bank staff stands in line with garlands, when Mt A descends in his Chariot.dindooohindoo
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samir sardana May 08, 2022 12:40am
Role of RBI -- Part 4 Mr A has the interest halved or waived,principal loan converted into equity & then uses his OWN 3 Billion USD to route it through some FII or entrepreneur (say USD 100 million) to be a partner in the CDR.He also secures some tax concessions. People say ,Y did he wait for 10 years ? Simple – in 10 years, the demand of the products outstripped supply & the Indian economy & banking was busted & vulnerable. But what of Company D ? Mr A says that he has redeemed his sins.So he lets the company be taken over by ARCIL, & uses his links with Netas to force some PSU to PURCHASE THE ASSETS OF COMPANY D, at the WDV & pay off the loans ! WONDERBAR ! But Mr A has to get back his 100 million USD in the CDR – & so,within a year he does an IPO,& his so called partner, exists his 100 Million at 150 Million,& pays 145 million in cash back to A,& Mr A sells of 5% of the equity This is the Indian Economic story and the RBI – which is based on lies and fraud.dindooohindoo
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