India's central bank has barred Dena Bank from extending new loans and recruiting new staff.
The Indian lender said in a May 11 release that it was notified of the new restrictions by the Reserve Bank of India in a May 7 letter. This follows the regulator's implementation of prompt corrective action on Dena Bank in June 2017, as a result of its high net nonperforming asset levels and negative return on assets.
Dena Bank plans to request that the RBI amend its latest order, Business Standard reported May 14, citing senior bank executives. The new order, they said, would have a significant impact on the bank's lending and revenue, as the lender would not be allowed to extend credit even under state-sponsored lending schemes.
Dena Bank reported a net loss of 19.23 billion rupees for the fiscal year ended March 31, which widened from a net loss of 8.64 billion rupees in the prior financial year. It also posted a net NPA ratio of 11.95% as of the end of March, up from 10.66% a year earlier.
As of May 11, US$1 was equivalent to 67.45 Indian rupees.