According to a report, the Central Bank of India may close 13 percent of its branches.

According to sources and a document obtained by Reuters, the Central Bank of India, a state-owned commercial bank, aims to close 13 percent of its branches to restore its financial health, which has been under pressure for several years.

According to a copy of a document reviewed by Reuters, the bank wants to cut the number of branches by 600 by closing or merging loss-making operations by the end of March 2023.

According to a government source who did not want to be identified, it is the most dramatic measure the lender has taken to repair its finances, and it will be followed by the sale of non-core assets such as real estate.

Except for Central Bank, all of the lenders have improved their financial health since then and have been removed from the RBI’s PCA list.

“The bank is fighting to emerge out of RBI PCA owing to low profit performance since 2017 and to utilise manpower in a more efficient and effective manner,” according to a memo handed out by the headquarters on May 4 to other branches and departments.

A bank that is subject to PCA is subject to increased regulatory scrutiny and may face lending and deposit restrictions, branch expansion and hiring freezes, and other borrowing restrictions.

The RBI enacted these rules at a time when Indian bankers were grappling with record amounts of bad debt, pushing the central bank to raise the thresholds.

“The move by the Reserve Bank of India is in accordance with its established goal of reducing loss-making assets on its books,” a government official said.