After State Bank of India (SBI), Central Bank of India, Union Bank and Indian Bank, public sector lender Punjab National Bank (PNB) on Saturday said it under-reported non-performing assets (NPAs) by Rs 2,617 crore for the fiscal year 2018-19, as per the risk assessment done by the Reserve Bank of India (RBI).
PNB said it reported gross NPAs of Rs 78,472.70 crore, while as per the RBI’s assessment the figure was Rs 81,089.70 crore, showing a divergence of Rs 2,617 crore in FY19. The divergence assessed by the RBI in net NPAs was also Rs 2,617 crore for the fiscal, PNB said in a stock exchange filing.
Last week, SBI said its gross NPAs should have been higher by Rs 11,932 crore at Rs 184,682 crore as against Rs 172,750 crore reported by the bank for 2018-19. Central Bank of India had under-reported NPAs of Rs 2,565 crore. Indian Bank reported a divergence of Rs 820 crore in its NPAs for 2018-19. Union Bank of India reported divergence of Rs 998.70 crore.
PNB said the divergence in provisioning for bad loans in FY19 was to the tune of Rs 2,091 crore. Taking into account the divergence assessed by the RBI in provisioning for bad loans, PNB said it would have reported a net loss of Rs 11,335.90 crore for FY19 as against a net loss of Rs 9,975.49 crore it reported earlier.
Similarly, PNB reported net NPAs of Rs 30,037.66 crore, compared to RBI’s assessment of Rs 32,654.66 crore. Provisions for NPAs made by the bank in FY19 stood at Rs 48151.15 crore but it needed to provide Rs 50,242.15 crore.
In November this year, market regulator Sebi had directed all listed banks to disclose any divergence in bad loan provisioning within 24 hours of receiving RBI’s risk assessment report, rather than waiting to publish the details in their annual financial statements. In a circular, Sebi noted that disclosures in respect of divergence and provisioning are in the nature of material events and hence necessitate immediate disclosure.
There have been several instances of under-reporting of bad loans by banks, prompting regulatory action by the Reserve Bank of India.