SBI Under-reported Bad Loans By Rs 11,932 Crore In FY19, Says RBI

New Delhi, December 10: India’s biggest lender State Bank of India under-reported bad loans by Rs 11392 crore in FY19 according to Risk Assessment Report of the RBI.

As per the SBI exchange filing, the gross NPA of SBI as assessed by the RBI on March 31, 2019, stood at Rs 184682 crore but the gross NPA reported by the bank is Rs 1,72,750 crore.  So, the gross NPA divergence stood at Rs 11,932 crore. However, the net NPA assessed by the apex bank was at Rs 77,827 crore but the SBI reported net NPA of Rs 65895 crore. So the net NPA divergence reported is worth Rs 11932 crore.

The central bank found that the divergence in provisioning for these non-performing assets (NPAs) stood at Rs 12,036 crore in FY19, SBI said in its regulatory filing.

This situation of divergence in bad loans and provisions arise when the assessment of bank and RBI differ.

The public sector lender accepted that had it taken into account the provisions based on RBI’s findings, it would have reported a net loss of Rs 6,968 crore instead of its reported profit of Rs 862 crore for FY19.

The scrip fell 1.04 per cent to Rs 313.45 per share at the Bombay Stock Exchange, weighing down on this news.  

SBI said the remaining impact on gross NPAs during Q3 FY20 is likely to be Rs 3,143 crore. The net NPA during Q3 FY20 is expected to be Rs 687 crore. Similarly, the remaining impact on provisioning during Q3 FY20 is expected to be Rs 4,654 crore.

For the year ended March 2019, SBI reported a net profit of Rs 862 crore after reporting losses in the last two years, helped by higher net interest income and improvement in asset quality.

Earlier in October this year, market regulator Securities and Exchange Board of India (Sebi) had directed stock exchange-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 recent months, there have been several instances of under-reporting of bad loans by lenders, prompting regulatory action by the RBI.