Reserve Financial institution of India (RBI) is analyzing as as to whether banks have adopted prudential norms in respect of those harassed property, a senior public sector financial institution official mentioned.
It is usually assessing classification, provisioning and debt recast in respect of these loans, the official added. This is part of an everyday annual inspection of the ebook of the banks that the central financial institution undertakes every year after the closure of the monetary 12 months, one other official mentioned.
A few of the accounts embody Videocon, Jindal Metal, and Energy, the official added.
This train comes at a time when gross NPAs within the banking system has risen to round Rs 10.three lakh crore, or 11.2 p.c of advances, in comparison with Rs eight lakh crore, or 9.5 p.c of the full mortgage, as on 31 March 2017.
Following the annual inspection of the final 12 months, many lenders, together with Axis Financial institution, Financial institution of India and Sure Financial institution, had been caught for under-reporting of NPAs.
The lenders began reporting divergences since June final 12 months for having under-reported NPAs in FY16. This was adopted by the second spherical of disclosures, beginning October, of under-reporting in FY17 by a number of lenders.
Generally, this led to a capturing up of NPAs and an ensuing bounce in provisions in opposition to dud property. This eroded their backside traces, and led to a sell-off within the inventory inflicting erosion of wealth for buyers.
Personal sector lenders, which had been reputed for his or her warning on the asset high quality entrance vis-a-vis the poorly ruled state-owned friends, had been the worst hit on this train.
Amongst others, mid-sized non-public sector lender Sure Financial institution was discovered to have under-reported gross NPAs by a whopping Rs 11,000 crore within the two fiscals, whereas the third largest lender Axis Financial institution was discovered to have a divergence of over Rs 14,000 crore and ICICI Financial institution had over Rs 5,000 crore on these accounts for FY16 alone.
Final 12 months, RBI had tweaked the foundations to make it obligatory for lenders to reveal under-reporting of dangerous property. Earlier than this there was a large ebook clean-up by way of the asset high quality overview (AQR) within the earlier 12 months.