Yes Bank, Axis Bank, others under-reported NPAs, says report

Aug 16, 2018, 12:36 PM IST

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. 

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Gross NPAs in banking system have risen to Rs 10.3 lakh crore, or 11.2% of advances. Image source: PTI

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In comparison, it was Rs 8 lakh crore, or 9.5% of total loans, as on March 31, 2017. Image source: PTI
 

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Since June last year, the banks started reporting divergences for having under-reported NPAs in FY16. Image source: PTI

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This was followed by a second round of disclosures, starting October, of under-reporting in FY17 by a few lenders. Image source: Reuters

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Impact! In most cases, this led to a shooting up of NPAs and an ensuing jump in provisions against dud assets. Image source: Reuters

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This eroded their bottomlines, and led to a sell-off in the stock causing erosion of wealth for investors. Image source: PTI

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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

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Yes Bank was found to have under-reported gross NPAs by a whopping Rs 11,000 crore in the two fiscals; Image source: Reuters

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Axis Bank was found to have a divergence of over Rs 14,000 crore; Image source: Reuters

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ICICI Bank had over Rs 5,000 crore on these accounts for FY16 alone. Image source: Reuters