SBI under-reported bad loans by Rs.11,932 crore in FY19: RBI Risk Assessment Report

According to a Reserve Bank of India (RBI) Risk Assessment Report, State Bank of India (SBI) under-reported b loans by Rs.11,932 crore in fiscal year 2018-19. Republic TV has accessed a report of SBI, which is country’s largest lender. It has been sent to National Stock Exchange of India and Bombay Stock Exchange disclosing divergence in asset classification and provisioning for n-performing assets (NPAs) as per RBI’s risk assessment report. This is mandated by Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.  

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A huge divergence of Rs.11,932 crore observed

As on March 31, 2019, SBI h reported gross NPAs worth Rs.1,72,750 crore while RBI report assessed NPAs to tune of Rs.1,84,682. This implies that a huge divergence in reporting of b loans was observed. Similarly, divergence in provisioning for NPAs was Rs.12,036 crore. massive under-reporting of loans also indicated that SBI’s declared profit after tax of Rs.862 crore was, in fact, a loss of Rs.6,968 crore. Furrmore, SBI commented that remaining impact on gross NPAs during third quarter of FY20 was Rs.3,143 crore.  

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RBI and SEBI push for disclosure of information

In April 2019, RBI h mandated disclosure of information if ditional NPAs were more than 15% of ir reported NPAs. Moreover, it also asked for information pertaining to provisioning divergence, if it exceeded 10% of a bank’s pre-provisioning profit. rmally, divergences in asset classification are disclosed in tes to accounts in annual financial statements. Subsequently in October, country’s market regulator SEBI tightened rms for asset disclosures. Apart from SBI, several or banks such as Indian Bank, Lakshmi Vilas Bank, Union Bank of India, UCO Bank and Yes Bank have also reported divergence in ir b loan figures for fiscal year 2018-19.  

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