Yes Bank, Axis Bank, others under-reported NPAs, says report
The apex bank is examining as to whether banks have followed prudential norms in respect of their stressed assets, a senior public sector bank official told PTI. 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, added an official. Many lenders, including Axis Bank, Bank of India and Yes Bank, were reportedly caught for under-reporting of NPAs in wake of the annual inspection of the last year.
Gross NPAs in banking system have risen to Rs 10.3 lakh crore, or 11.2% of advances. Image source: PTI
In comparison, it was Rs 8 lakh crore, or 9.5% of total loans, as on March 31, 2017. Image source: PTI
Since June last year, the banks started reporting divergences for having under-reported NPAs in FY16. Image source: PTI
This was followed by a second round of disclosures, starting October, of under-reporting in FY17 by a few lenders. Image source: Reuters
Impact! In most cases, this led to a shooting up of NPAs and an ensuing jump in provisions against dud assets. Image source: Reuters
This eroded their bottomlines, and led to a sell-off in the stock causing erosion of wealth for investors. Image source: PTI
Private sector lenders, which were reputed for their caution on the asset quality front vis-a-vis poorly governed PSB peers, were the worst hit in this exercise. Image source: Reuters
Yes Bank was found to have under-reported gross NPAs by a whopping Rs 11,000 crore in the two fiscals; Image source: Reuters
Axis Bank was found to have a divergence of over Rs 14,000 crore; Image source: Reuters
ICICI Bank had over Rs 5,000 crore on these accounts for FY16 alone. Image source: Reuters