RBI Eyes On 200 Top Bad Loan Accounts

RBI Eyes On 200 Top Bad Loan Accounts

BE/RBI NOTE/31/2018

In order to avoid disgusting surprises in the bankruptcy court or surprises after debt resolution, RBI has identified around 200 loan accounts and thus would be going through books as far as 2011, as a part of their inspection process.

  1. Some of such accounts include Videocon, Essar Steel, ABG Shipyard, Bhushan Steel and Monnet Ispat.
  2. During their inspection process, apart from other checks, RBI would be throwing more stress on the details related to
    • Customers’ repayment history
    • Classification of Assets
    • Provisions
    • Debt reconstruction.
  3. RBI in this connection has sought from banks details of big stressed accounts and the provisions made therein as also the Asset Classification adopted in these banks.
  4. Though the recourse to be adopted in case of any irregularity being observed is not made clear, the main reason for such a move is to clean the bank books before 27th August 2018 which is the deadline for finalizing the debt resolution for loans of Rs. 2000 crore and above. If this does not happen, cases will be referred to NCLT for bankruptcy resolution.

It may also be noted that an increase in the Gross non-performing assets was slower during June quarter as compared to previous periods.

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