INSUBCONTINENT EXCLUSIVE:
In a bid to come out of the Prompt Corrective Action framework, state-run Allahabad Bank on Friday said it has used the Rs 6,896 crore
capital infusion fund, received from the Central government, to make loan loss provision in order to bring down the net NPA ratio and also
to shore up its capital base."We wish to inform you that out of the capital infusion fund of Rs 6,896 crore received from the Government of
India, Rs 2,750 crore has been appropriated to make loan loss provision in order to bring down the net NPA ratio below the threshold under
Prompt Corrective Action Framework," it said in a regulatory filing.The lender also said: "Remaining Rs 4,146 crore has been appropriated
towards shoring up the capital base so as to enhance the capital to risk weight asset ratio (CRAR) of the bank above the regulatory minimum
of 10.875 per cent with tier-1 including CET 1 CRAR above 8.875 per cent, i.e
above the threshold under Prompt Corrective Action framework of the Reserve Bank of India".During the third quarter of FY19, gross
non-performing assets (NPAs) of the lender increased on a quarter-on-quarter basis in absolute terms to Rs 28,218.79 crore from Rs 27,236.19
crore in the September quarter.The net NPA was at Rs 10,865.26 crore in the third quarter, down from Rs 11,082.74 crore by the end of the
September quarter.Gross NPA of the bank as a percentage of total loans was at 17.81 per cent by the end of the December quarter against
17.53 per cent in the previous quarter
During the period under review, net NPA ratio stood at 7.70 per cent, which decreased sequentially from 7.96 per cent in the second quarter
this fiscal.The lender posted a net loss of Rs 732.81 crore for the quarter ended December 31, 2018, narrowing the net loss of Rs 1,263.79
crore reported for year ago period.The state-run bank, which is under the PCA, had reported a net loss of Rs 1,822.71 crore for the second
quarter of the current fiscal.The bank's MD and CEO S.S
Mallikarjuna Rao had recently said the lender was expecting to make a turnaround and coming out of the PCA measure of the apex bank by June
2019.(Except for the headline, this story has not been edited by TheIndianSubcontinent staff and is published from a syndicated feed.)
