Private banks hid substantial bad debts, reveals RBI-mandated disclosure
RBI had assessed that yes Bank had Rs 4,930 crore of bad loans against actual reported Rs 750 crore Even after asset quality review of the Reserve Bank of India (RBI), private sector banks probably continued to hide a large chunk of their bad assets. But now those assets are all scheduled to come up in public glare as the central bank recently brought out a rule that mandated banks to disclose RBI assessed bad debt numbers, if the divergence between the central bank’s assessment and the bank’s actual assessment was more than 15 per cent. Yes Bank Ltd., which raised capital through qualified institutional placement route in the end of March, reported in its annual report that RBI has pegged its total gross NPA at 5 per cent for fiscal year 2015-16, against the bank’s own assessment of only 0.76 per cent for that financial year. According to Credit Suisse, Axis Bank’s NPAs were higher at 4.5 per cent of loans (vs 1.78 per cent reported) and at ICICI Bank, the NPA numb...