Banks of lower than 8 percent capital are “under capitalized” and the correction actions include “may not take trust deposits; may not make any capital distribution or pay a management fee; growth of total assets must be restricted; must submit capital restoration plan and prior approval is required to acquisitions, branching, and new lines of business and some discretionary actions”.
Additional discretionary corrective actions may be imposed. Fro banks of lower than 6 percent capital, in addition to the above measures, “transactions with alliance must be restricted; interest rates paid on deposits, and bonuses and salary raises to senior executives officers must be restricted”.