Kolkata– State-run lender Allahabad Bank on Friday said it proposes to close its branch in Hong Kong as a part of rationalisation of overseas operations.

Incidentally, the Hong Kong Monetary Authority (HKMA) had, in June, enhanced supervisory arrangements on its Hong Kong branch while “assessing implications of the capital positions” of the lender.

“..we wish to inform you that in compliance with the Government of India directives under PSBs Reform Agenda, our Bank has initiated various steps. As a part of its said initiatives and having regard to the agenda for rationalisation of Bank’s overseas operations, the bank proposes to close its Hong Kong Branch,” it said in a regulatory filing.

The bank’s latest annual report said its Hong Kong branch had earned operating profit of Rs 90.52 crore and net profit of Rs 44.86 crore in the financial year 2017-18.A

In the last fiscal, the bank’s international business stood at Rs 12,871 crore and recorded a negative year-on-year growth of (-) 8.91 per cent on account of 12.82 per cent year-on-year drop in overseas advances.

In fact, under the capital adequacy guidelines stipulated by the Reserve Bank of India (RBI), the lender is required to maintain a CRAR of 9 per cent with minimum Common Equity Tier I (CET1) of 5.5 per cent as on March 31, 2019.A

Notably, the RBI had imposed additional restrictions on Allahabad Bank under prompt corrective action (PCA) framework.

The lender was asked to restrict expansion of risk-weighted assets, reduce exposure to high-risk loans and restrict accessing or renewing wholesale deposits. (IANS)