Banks to get Rs 27,000-cr breather on RBI provisioning move
PrintListen to this Article
The Reserve Bank of India (RBI) recently gave an extra quarter (till June 2018) to reach 50 per cent provisioning (40 per cent by March 2018) on accounts referred to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC) framework.
It also permitted lenders to spread-out of marked-to- market (MTM) losses on investments incurred in the third and fourth quarters of fiscal 2018 across four quarters.
Rating agency Crisil in a report today said banks profitability has come under intense pressure as provisioning requirements have been rising with ageing of non-performing assets (NPAs), withdrawal of various restructuring schemes prior to February 2018 causing an increase in NPAs, and a sharp rise in bond yields since September 2017 leading to significant MTM losses in their gilt investments.
"Accounting for the MTM losses over four quarters would mean nearly Rs 8,000 crore provisioning relief including write-backs for banks in the last quarter of fiscal 2018," its director Rama Patel said.
"Another relief worth Rs 19,000 crore, in the form of lower provisioning or write-back, would also ensue because the RBI has permitted banks to achieve 50 per cent provisioning on accounts referred to NCLT by June 2018 instead of March as stipulated earlier," he added.
The report, however, said in fiscal 2018-19, operating profitability of banks should stabilise on the back of incremental credit growth and lower interest reversals after reduction in fresh slippages to NPAs but overall, bottomlines will remain under pressure because of high provisioning burden stemming from the large stock of NPAs. #casansaar (Source - PTI, NPA)
Category : Banking | Comments : 0 | Hits : 446
The Financial Intelligence Unit-India (FIU-IND), in furtherance of the powers conferred upon the Director FIU-IND under Section 13(2)(d) of the Prevention of Money Laundering Act (PMLA), 2002, has imposed a monetary penalty of Rs. 5,49,00,000 (rupees five crore forty nine lakh) on Paytm Payments Bank Ltd with reference to the violations of its obligations under the PMLA read with the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (PML Rules) issued thereunder and applicable ...
The government on Monday informed the Lok Sabha that all Scheduled Commercial Banks have written off nearly Rs 10.6 lakh crore in the last 5 years, out of which nearly 50 per cent belong to large industrial houses. It also said that nearly 2300 borrowers, each having a loan amount of Rs 5 crore or more, wilfully defaulted around Rs 2 lakh crore. As per the Reserve Bank of India (RBI) guidelines and policy approved by bank boards, NPAs, including those in respect of which full provisioning has...
The government has cleared the extension of tenure of managing directors of two public sector lenders -- Bank of Maharashtra (BoM) and Central Bank of India. According to sources, Appointments Committee of the Cabinet (ACC) has approved extension of term of office of A S Rajeev, MD and CEO of BoM, for six months till his superannuation. Besides, sources said, ACC has extended the term of M V Rao, MD and CEO of Central Bank of India, till July 31, 2025.
The Central Bureau of Investigation (CBI) has started probe into the multi-crore banking fraud in which a former Punjab National Bank (PNB) employee, M.P. Rijil, allegedly swindled ?21 crore from multiple bank accounts, including the eight accounts maintained by the Kozhikode Corporation. The case is being investigated by the Kochi unit of the CBI in compliance with an earlier order issued by the Kerala High Court. The case, which was initially investigated by the Kozhikode Town poli...
The Enforcement Directorate (ED) on Saturday arrested two promoters of a Chandigarh-based pharma company, who are also the co-founders of the Sonepat-based Ashoka University, and a chartered accountant in a money-laundering probe linked to an alleged bank fraud. Official sources said the central agency also continued with its searches against the group for the second day, including at the Ashoka University's corporate and registered offices in Delhi and campus in Sonepat. Parabolic Dru...
Comments