For public sector banks that have reported net losses and showing no signs of improving the ratio of their non-performing assets, the Government of India has asked them to begin rationalising their branches, especially overseas. Following the directive of the Government of India, Allahabad Branch which is currently under prompt corrective action (PCA) as well, is all set to bring the curtains down on their Hong Kong branch.
With a good number of public sector banks being put under prompt corrective action (PCA) by the Reserve Bank of India for failing to improve their net losses and non-performing assets over two financial years, the Government of India as well as the Central Bank have directed such banks to cut costs and close branches overseas that are not bringing them any capital.
In a statement, Allahabad Bank said that they are going to propose the closing of their Hong Kong Branch, as they will be following the Government of India public sector bank reform agenda. Part of the reform agenda for PSBs across the country is to rationalise overseas branches failing to bring in any capital. In view of this, Allahabad Bank is in the process of shutting down their Hong Kong branch.
Source: Financial Express