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RBI’s IDBI Bank’s Gross Estimate Differs from The Actual Data

In its latest annual report, IDBI Bank reported that its gross non-performing assets (NPAs) of Rs24,875 crore in FY16 were lower than the Reserve Bank’s estimate of Rs31,691 crore.

This indicates that the public-sector bank may have under-reported its GNPAs by Rs6,816 crore.

In the report, the bank also mentioned that there was a divergence in the bank’s provisions for FY16. IDBI had kept aside Rs10,232 crore in provisions, while the RBI had estimated it to be around Rs12,292 crore — a difference of Rs2,061 crore.

In the month of April, the RBI directed banks to unveil the state of their bad loan divergence in their financial statements if it exceeded 15 percent. In the case of IDBI Bank, the divergence in GNPAs stood at 27 percent.

IDBI Bank was put under RBI’s prompt corrective action in May after its bad loans surged. By the end of FY17, IDBI Bank’s gross bad loans were over Rs44,750 crore.

IDBI Bank has now joined ICICI Bank, Yes Bank, Axis Bank and RBL Bank to make such disclosures. In the case of Yes Bank, the company had reported GNPAs of Rs748.9 crore by the end of FY16. However, the RBI had pegged the bank’s actual level of GNPAs at Rs4,925.6 crore, six times higher than what was reported by the bank.

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