<p class="title">As part of its effort to contain rising non-performing assets (NPAs), the RBI has started scrutiny of 200 large accounts to assess the level of stress and provisioning done against them by respective banks.</p>.<p class="bodytext">Reserve Bank of India (RBI) is examining as to whether banks have followed prudential norms in respect of these stressed assets, a senior public sector bank official said.</p>.<p class="bodytext">It is also assessing classification, provisioning and debt recast in respect of those loans, the official added.</p>.<p class="bodytext">This is a part of the regular annual inspection of the book of the banks that the central bank undertakes each year after the closure of the financial year, another official said.</p>.<p class="bodytext">Some of the accounts include Videocon, Jindal Steel and Power, the official added.</p>.<p class="bodytext">This exercise comes at a time when gross NPAs in the banking system has risen to around Rs 10.3 lakh crore, or 11.2 per cent of advances, compared to Rs 8 lakh crore, or 9.5 per cent of the total loan, as on March 31, 2017.</p>.<p class="bodytext">Following the annual inspection of the last year, many lenders, including Axis Bank, Bank of India and Yes Bank, were caught for under-reporting of NPAs.</p>.<p class="bodytext">The lenders started reporting divergences since June last year for having under-reported NPAs in FY16. This was followed by the second round of disclosures, starting October, of under-reporting in FY17 by a few lenders.</p>.<p class="bodytext">In most cases, this led to a shooting up of NPAs and an ensuing jump in provisions against dud assets. This eroded their bottom lines and led to a sell-off in the stock causing erosion of wealth for investors.</p>.<p class="bodytext">Private sector lenders, which were reputed for their caution on the asset quality front vis-a-vis the poorly governed state-owned peers, were the worst hit in this exercise.</p>.<p class="bodytext">Among others, mid-sized private sector lender Yes Bank was found to have under-reported gross NPAs by a whopping Rs 11,000 crore in the two fiscals, while the third largest lender Axis Bank was found to have a divergence of over Rs 14,000 crore and ICICI Bank had over Rs 5,000 crore on these accounts for FY16 alone.</p>.<p class="bodytext">Last year, RBI had tweaked the rules to make it compulsory for lenders to disclose under-reporting of bad assets. Before this, there was a massive book clean-up through the asset quality review (AQR) in the previous year. </p>
<p class="title">As part of its effort to contain rising non-performing assets (NPAs), the RBI has started scrutiny of 200 large accounts to assess the level of stress and provisioning done against them by respective banks.</p>.<p class="bodytext">Reserve Bank of India (RBI) is examining as to whether banks have followed prudential norms in respect of these stressed assets, a senior public sector bank official said.</p>.<p class="bodytext">It is also assessing classification, provisioning and debt recast in respect of those loans, the official added.</p>.<p class="bodytext">This is a part of the regular annual inspection of the book of the banks that the central bank undertakes each year after the closure of the financial year, another official said.</p>.<p class="bodytext">Some of the accounts include Videocon, Jindal Steel and Power, the official added.</p>.<p class="bodytext">This exercise comes at a time when gross NPAs in the banking system has risen to around Rs 10.3 lakh crore, or 11.2 per cent of advances, compared to Rs 8 lakh crore, or 9.5 per cent of the total loan, as on March 31, 2017.</p>.<p class="bodytext">Following the annual inspection of the last year, many lenders, including Axis Bank, Bank of India and Yes Bank, were caught for under-reporting of NPAs.</p>.<p class="bodytext">The lenders started reporting divergences since June last year for having under-reported NPAs in FY16. This was followed by the second round of disclosures, starting October, of under-reporting in FY17 by a few lenders.</p>.<p class="bodytext">In most cases, this led to a shooting up of NPAs and an ensuing jump in provisions against dud assets. This eroded their bottom lines and led to a sell-off in the stock causing erosion of wealth for investors.</p>.<p class="bodytext">Private sector lenders, which were reputed for their caution on the asset quality front vis-a-vis the poorly governed state-owned peers, were the worst hit in this exercise.</p>.<p class="bodytext">Among others, mid-sized private sector lender Yes Bank was found to have under-reported gross NPAs by a whopping Rs 11,000 crore in the two fiscals, while the third largest lender Axis Bank was found to have a divergence of over Rs 14,000 crore and ICICI Bank had over Rs 5,000 crore on these accounts for FY16 alone.</p>.<p class="bodytext">Last year, RBI had tweaked the rules to make it compulsory for lenders to disclose under-reporting of bad assets. Before this, there was a massive book clean-up through the asset quality review (AQR) in the previous year. </p>