In its ongoing crackdown against high NPAs in the banking sector, the Reserve Bank of India (RBI) has initiated "prompt corrective action" (PCA) at Dena Bank because of its high net non-performing assets (NPA) and negative return on assets.

Dena is the third bank, after IDBI Bank and UCO Bank where PCA has been initiated by the RBI. Under the PCA framework RBI introduced in April, the Central Bank has said that banks can have a maximum net NPA ratio of 6%. For Dena, net NPA ratio at the end of the fourth quarter for the bank stood at 10.66%. Going over the maxiumum ratio can result in banks having to sell their assets and cut unsecured exposure. It is likely that under RBI's revised PCA rules, several banks could face similar RBI intervention.