Shares of Indian Overseas Bank today fell 2 per cent on central bank’s corrective order.
The Reserve Bank of India has initiated corrective action on the lender, without giving details.
IOB shares have slumped 41.3 per cent so far this year, under-performing a 6.1 per cent fall in the NSE bank sub-index.
Deepak Tewary, analyst at SPA securities, said the RBI order was likely “precautionary’’ and intended to help improve IOB’s performance.
He added that IOB’s return on assets was below RBI’s threshold of 0.25 pct for the three out of last four quarters, and may have triggered the action.
Tewary said he expected the measures to remain in place for at least two quarters.