The Reserve Bank of India has imposed restrictions on Kolkata-headquartered Allahabad Bank, including on expansion of risky assets, creation of non-banking assets and accessing/renewing wholesale/costly deposits. It has also asked the PSB to reduce exposure to unrated and high-risk advances.

The bank, which is already under prompt corrective action (PCA) due to high net NPAs and negative return on assets, in a notice to the stock exchanges, said it has been asked by the RBI to take these actions. Typically, under PCA, a bank’s branch expansion is restricted and lending is narrowed to relatively less risky segments to nurse it back to health.

The RBI directive comes in the wake of the bank’s common equity tier-1 (core capital) breaching the minimum regulatory requirement of 7.375 per cent in March 2018.

Allahabad Bank said its board of directors will be meeting on May 15 to take stock of the developments.

Late last week, Dena Bank, which is also under PCA, said the RBI has restricted it from assuming fresh credit exposure and recruitment of staff.