SBI under-reported bad loans by Rs 11,932 crore in FY19: RBI report

Based on the divergence assessed by RBI in provisioning for bad loans, SBI said it would have reported a net loss of Rs 6,968 crore in FY19 as opposed to a profit of Rs 862 crore

Public sector lender State Bank of India (SBI) under-reported its non-performing assets for the fiscal year FY19, a risk-assessment report of the Reserve Bank of India has found. In a regulatory filing on Tuesday, the bank said it had under-reported its bad debts by Rs 11,932 crore.

The divergence in gross non-performing assets (NPAs) assessed by the central bank for SBI was Rs 11,932 crore in FY19. Similarly, the divergence assessed by the RBI in net NPAs was Rs 11,932 crore for FY19.

Also, the RBI found that SBI had made less provisions for its bad loans in FY19. The divergence found in provisions for bad loans in FY19 was to the tune of Rs 12,036 crore.

Based on the divergence assessed by the RBI in provisioning for bad loans, SBI said it would have reported a net loss of Rs 6,968 crore in FY19 as opposed to a profit of Rs 862 crore.  

The bank said, it reported gross non-performing assets to the Rs 1.72 trillion and according to RBI’s assessment; the bank had gross NPAs of Rs 1.84 trillion. Similarly, it reported a net NPA of Rs 65,895 crore but RBI’s assessment showed its net NPAs are 77,827 crore.

And, provisions made by the bank in FY19 was Rs 1.06 trillion but it was needed to provide Rs 1.18 trillion.  

SBI also said post the divergence assessed by the RBI in its bad loan book, the net impact on the gross NPAs in Q3 FY20 will be Rs 3,143 crore and on the net NPAs will be Rs 687 crore.

Also, the bank will have to make extra provisions to the tune of Rs 4,654 crore in Q3FY20 .  

Recently, the market regulator made it mandatory for listed banks to disclose bad loan divergence within a day of receiving the risk assessment report from the RBI.

Despite the divergence reported, the stock of the bank is marginally down. It was trading at Rs 316.10, down 0.21 per cent.