RBI finds Rs12,000-cr divergence in SBI’s bad loan reporting in FY19

11 Dec 2019


State Bank of India (SBI), the country’s largest lender, underreported bad loans and the bank’s provisioning against bad loans by Rs11,932 crore and Rs12,036 crore, respectively, in 2018-19, the Reserve Bank of India (RBI) has found.

While others lenders, including Union Bank, UCO, Lakshmi Vilas and Yes Bank, have also reported a divergence in NPA numbers for FY19, SBI’s is the highest such figure reported by any bank so far for the last fiscal.
SBI today reported bad loan divergence of Rs11,932 crore for the last financial year besides disclosing divergence of Rs12,036 crore in provisioning for the financial year ending March 2019, after RBI detected the discrepancy.
The gross non-performing assets (NPAs) reported by the bank stood at Rs1,73,000 crore as of 31 March 2019 while its gross NPAs detected by the RBI was at Rs1.85 lakh crore for the period.
While the bank provided Rs1,07,000 crore against bad loans, the provisioning requirement as assessed by RBI stood at Rs1,19,ooo crore, the bank said in a regulatory filing.
Similarly, the net NPA of SBI stood at Rs77,827 crore compared to disclosed figure of Rs65,895 crore, reflecting divergence of Rs11,932 crore, it said. 
SBI’s net profit for the fourth-quarter of Rs838 crore now stands adjusted to a net loss of Rs6,986 crore. This is after taking the additional provisioning into account, and there would be a subsequent impact of Rs3,143 crore on gross NPAs, Rs687 crore on net NPAs and Rs4,654 crore on provisioning against bad loans in the third quarter of the current financial year.
The divergences were part of the bank's Risk Assessment Report by RBI for the financial year 2018-19. Market regulator Sebi last month had directed all listed banks to disclose any divergence in bad loan provisioning within 24 hours of receiving RBI's risk assessment report. 
Information on divergences is price-sensitive and needs to be disclosed quickly to shareholders, said Sebi.
The RBI currently mandates disclosure of provisioning if in the central bank's assessment, it exceeds 10 per cent of the reported profits before provisioning.
Indian Bank, Union bank, Bank of India, Indian Overseas Bank have also announced divergences on their balance sheets on account of divergence reporting of NPAs and provisioning.
SBI on Monday announced a 10 basis points cut in one-year marginal cost of funds-based lending rate (MCLR). It brings SBI's one-year MCLR down to 7.90 per cent from 8 per cent.
The bank claimed it continued to be the cheapest loan provider in the country.

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