Current Affairs - Banking - Discussion

The country's central bank, Reserve Bank of India (RBI) has put the Prompt Corrective Action (PCA) Framework against Lakshmi Vilas Bank (LVB) after an inquiry against the directors of the bank over the alleged fraud. RBI puts the bank in PCA due to reasons like high net NPA (Non Performing Assets), insufficient capital to risk-weighted assets ratio (CRR) and Common Equity Tier 1 (CET1) negative RoA (Return on assets) for two consecutive years and high leverage, based on the on-site inspection under the Risk Based Supervision carried out for the year ended 31 March, 2019. The bank's net NPA registered at 7.49%, capital adequacy ratio was at 7.72% and its RoA was -2.32% as on March 2019.