RBI to flag bad loan issues with Finance Ministry in pre-Budget meet

Fresh provisioning and telco loans to figure in pre-Budget meet. Inability to find resolution may put Rs 3.8 trn loans at risk

The Reserve Bank of India (RBI) and the finance ministry will discuss the additional provisioning banks may be expected to make on account of the central bank’s June 7 circular, and the stress in telco loans following the Supreme Court (SC) order on adjusted gross revenue, which entails a payout of Rs 1.33 trillion to the Centre, inclusive of interest and penalties.

The development comes on the heels of North Block’s stand that the overall stress in the banking sector was headed southwards. The central bank’s Financial Stability Report (FSR), released last week, had observed that the gross non-performing assets