Corporation Bank in the red
Corporation Bank is down in the red, just Rs.1.40 away from hitting its 52-week low of Rs.38.05.
The stock is in the news for the wrong reasons. Its NPAs have exceeded 10% and following this, RBI has imposed restrictions on the bank for carrying out banking activities under the Prompt Corrective Actions (PCA).
The restrictions include curb on expenses such as opening branches, recruiting staff, giving increments to employees and loans can now be disbursed only to companies with ‘above investment grade’ rating.
The Bank has stated that this action will not have any material impact on the performance of the bank and will contribute to improvement in internal control of the bank in its activities. Yet, the fact that it is on a watch is worrisome enough.
This is the 8th bank to come under PCA; other seven being Oriental Bank of Commerce, Indian Overseas Bank, Dena Bank, IDBI Bank, Central Bank, UCO Bank and Bank of Maharashtra.