MUMBAI: The RBI has said that banks no longer need to disclose their exposure to the IL&FS group separately in their results. This follows the National Company Law Appellate Tribunal (NCLAT) allowing lenders to classify loans to the troubled group as performing assets (NPAs) last week.
The RBI had earlier asked banks to disclose how much they have lent to the IL&FS group and how much of it they have provided for. The move would have forced lenders to set aside a part of their earnings as there was a strong likelihood of losing some of their money.
Most private banks have already announced their results and disclosed their IL&FS exposure. However, many public sector banks like SBI , which have the bulk of IL&FS loans, are yet to announce their results.
Normally the RBI does not ask banks to publicise details of loans to specific borrowers. In the IL&FS case, the regulator had deviated by asking banks to disclose in their notes to accounts their exposure to the group and provisions towards it. This was to ensure that investors were properly informed about the level of stressed loans even as banks adhered to the court order.
The RBI had petitioned the court to ensure that banks recognise the stress in these loans and make provisions towards the same.
Source: timesofindia.indiatimes.com