As part of its effort to contain rising non-performing assets , the RBI has started scrutiny of 200 large accounts to assess level of stress and provisioning done against them by respective banks.<\/p>\n
The Reserve Bank of India is examining as to whether banks have followed prudential norms in respect of these stressed assets, a senior public sector bank official said.<\/p>\n
It is also assessing classification, provisioning and debt recast in respect of those loans, the official added.<\/p>\n
This is a part of regular annual inspection of book of the banks that the central bank undertakes each year after the closure of the financial year, another official said.<\/p>\n
Some of the accounts include Videocon, Jindal Steel and Power, the official added.<\/p>\n
This exercise comes at a time when gross NPAs in the banking system has risen to around Rs 10.3 lakh crore, or 11.2% of advances, compared to Rs 8 lakh crore, or 9.5% of total loan, as on March 31, 2017.<\/p>\n
Following the annual inspection of the last year, many lenders, including Axis Bank, Bank of India and Yes Bank, were caught for under-reporting of NPAs.<\/p>\n
The lenders started reporting divergences since June last year for having under-reported NPAs in FY16. This was followed by a second round of disclosures, starting October, of under-reporting in FY17 by a few lenders.<\/p>\n
In most cases, this led to a shooting up of NPAs and an ensuing jump in provisions against dud assets. This eroded their bottomlines, and led to a sell-off in the stock causing erosion of wealth for investors.<\/p>\n
Private sector lenders, which were reputed for their caution on the asset quality front vis-a-vis the poorly governed state-owned peers, were the worst hit in this exercise.<\/p>\n
Among others, mid-sized private sector lender Yes Bank was found to have under-reported gross NPAs by a whopping Rs 11,000 crore in the two fiscals, while the third largest lender Axis Bank was found to have a divergence of over Rs 14,000 crore and ICICI Bank had over Rs 5,000 crore on these accounts for FY16 alone.<\/p>\n","protected":false},"excerpt":{"rendered":"
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