RBI Discovers Rs 45.68 Crore Bad Loans Hidden
These hidden bad loans are more than what lenders had assessed previously.
Five biggest state-run banks have reported bad loans up to Rs 45.68 crore ($6.8 billion). This is more than the lenders had assessed previously.
According to a Bloomberg report, Bank divergence at State Bank of India is Rs 23.24 crore, Punjab National Bank is Rs 2.21 crore, Bank of Baroda is Rs 2.92 crore, Canara Bank is Rs 3.25 crore and Bank of India is 14.06 crore.
If you add the debt at IDBI Bank Ltd which is not one of the biggest banks, this figure goes up to $8.3 billion, with an additional debt of Rs 10.28 crore.
These are hidden bad debt revealed recently, a report published in The Print said.
The audits by the regulator for the year ended March 31, 2017, revealed the discrepancies, triggering large losses as the banks increased provisions.
It is a blow to the sector given that half of India’s 22 government-controlled banks are already under the Reserve Bank of India’s strict Prompt Corrective Action program which limits lending and expansion.
Asset quality may worsen as tighter regulations kick in this year and stress rises in the crucial power sector, said the Print report.
Few of these banks may even find it hard to survive as PCA restrictions continue, Former RBI Deputy Governor SS Mundra told BloombergQuint.