May soon classify DHFL as NPA: SBI Chairman

“It was not an NPA at the end of September. We will see what happens by the end of December,” Kumar said on the sidelines of the India Mortgage leadership conclave.

SBI Chairman Rajnish Kumar

State Bank of India (SBI) may soon classify Dewan Housing Finance Company (DHFL) as a non-performing asset (NPA). Chairman Rajnish Kumar said on Wednesday, “It is not classified as NPA yet, but it will be.”

“It was not an NPA at the end of September. We will see what happens by the end of December,” Kumar said on the sidelines of the India Mortgage leadership conclave.

Sources told FE one PSU bank has already classified DHFL as an NPA and others would also follow suit. DHFL is widely believed to have made its last repayment on July 5. Once an account leaves dues unpaid for 90 days at a stretch, banks must classify it as an NPA as per Reserve Bank guidelines in June 7 circular.

Kumar said more instances of non-bank lenders slipping into the NPA category are unlikely to crop up. “I cannot say either way (if more such credit events are expected). But, as of now, our take is that the rest of the NBFCs should be able to survive.”

On the beleaguered mortgage financier’s proposed resolution plan, Kumar said that the lenders were awaiting forensic audit report on the alleged fraud at Dewan Housing. He said a call would be taken on the resolution plan after the November 11 hearing in the court. Kumar said SBI would look at opportunities in the project lending space, which has been vacated by others. On the real estate industry, the SBI Chairman said that real estate taxation is not favourable for companies. —FE