RBI audit reveals NPA divergence of Rs 45,600 crore in PSBs
SBI had reported a net loss of Rs 3,969.2 crore in fourth quarter of last fiscal compared to Rs 1,045.5 cr.
New Delhi: Top five public sector banks have reported large, discomforting NPA divergence to the tune of Rs 45,600 crore. This has come to light after the Reserve Bank of India’s (RBI) auditing by March-end, 2017. The divergence in non-performing assets is the difference between the central bank’s assessment and the bank's reported non-performing loans.
The difference has resulted in a steep rise in provisions for bad loans and resultant losses recoded by state-run banks for the quarter ended March 31, 2018. FC has reported that state-owned banks so far have reported a staggering loss of Rs 54,000 crore January-March period of the previous fiscal. The asset quality woes for lenders were further compounded with the recent substitution of the framework for resolution of stressed assets with the revised structure issued by the RBI on February 12, 2018. The new norms require banks to implement a resolution plan on account of being classified as a special mention account (SMA), i.e. repayments overdue even by a day.
For the country’s largest lender State Bank of India (SBI), a divergence of Rs 23,239.13 crore and Rs 17,518.47 was seen in the gross and net NPAs, respectively. At the end of FY17, SBI reported gross NPA of Rs 1,12,342.99 crore. Upon RBI’s assessment, gross NPAs came at Rs 1,35,582.12 crore.
Similarly, SBI announced the net NPA of Rs 58,277.38 crore while RBI classified net NPAs worth Rs 75,795.85 crore.
SBI had reported a net loss of Rs 3,969.2 crore in the fourth quarter of last fiscal compared to Rs 1,045.5 crore in the same period of the previous year. The jump in losses is probably due to provisions for hidden bad loans.
On the same lines, Bank of India (BoI) reported a Q4 net loss of Rs 3,970 crore on high provisions.
BoI disclosed that the divergences in gross NPA were Rs 14,057 crore in FY17 while divergences in net non-performing asset was Rs 9,707 crore.
Still more worrying is the increase in non-performing asset divergence. Based on the data disclosed by banks for the three quarters of 2017-18, the divergences in asset quality reported by Indian banks as on March 31, 2017 surpassed the divergences reported as on March 31, 2016, according to ICRA Ratings.
The divergences in gross non-performing assets (GNPAs) as on March 31, 2017 stood at Rs 54,100 crore for banks where the risk-based supervision (RBS) audit was completed by the Reserve Bank of India as compared to Rs 43,500 crore as on March 31, 2016.