Shares of Oriental Bank of Commerce fell as the Reserve Bank of India has started corrective action over bad loans.
Mid-sized Indian state-run lender Oriental Bank of Commerce Ltd fell as much as 4.3 per cent in early trade.
The RBI has initiated “prompt corrective action” (PCA) against the bank over its high amount of net non-performing assets. Corrective action plan requires a bank to enact curbs on hiring, branch expansion and taking on new loans.
Oriental Bank Managing Director says as per a media report that the bank has stopped taking 'risky exposure' to certain sectors and will restrict its fresh advances to cos with 'BBB' or higher ratings.
The bank's chief said focus was on retail, farm and SME segment, which accounted for 50 per cent of its loan book, the report added.
OBC stock hit its lowest level since August 16, and has posted the biggest intraday percentage loss since September 22. The bank has posted a net loss for the June quarter, with net NPA rising to 9.56 per cent.
The stock was the major loser on the Nifty PSU bank index which was up 0.29 per cent.