The Reserve Bank of India (RBI) has sent a fresh list of 240 accounts to state-owned banks. The RBI asking them to recognise these loans as NPAs, if not already done.
The new set of accounts that could be classified as bad loans include credit to Reliance Naval, JSPL and Ratnagiri Gas.
The RBI directive comes as it has started the second round of asset quality review (AQR). The central bank wants to know if lenders have classified these accounts and have provided provisions against them, sources said.
The Reserve Bank had launched AQR in the second half of 2015 under which its inspectors checked the books of all banks and identified bad assets.
The second round AQR assumes extra significance because the RBI is asking banks to recognize them as NPA from a back date if they haven’t identified them as NPAs already. The NPA classification with retrospective effect would mean higher provisions which would impact their lending potential and bottom lines.
Sources said yet another list of NPAs could be released in September quarter because a new bunch of NPAs is being reported.
The income recognition and asset classification (IRAC) norms require banks to set aside 15 percent of a loan exposure as provisioning in the first year of an account are classified as NPA.
The amount of provisioning increases with each year that the account continues to be an NPA. By the fourth year of a bad loan, banks are required to fully provide against the underlying loan amount.