"Our gross NPAs will come down to that extent. To that extent, provisioning on these accounts will also fall but it may not have an impact on net profit in January-March," said a senior official close to the development.
On April 29, in its annual monetary policy statement, RBI relaxed the norms on NPAs caused by time overrun in commencement of commercial production in the case of infrastructure projects to two years from one year earlier.
According to the new norms, banks will have to classify an infrastructure loan as a sub-standard asset if the date of commercial production under the project extends beyond two years after the date of completion of the project as originally envisaged.
The new norms have come into effect from March 31. According to analysts, Punjab National Bank is likely to benefit the most from the prudential norms relaxation as it had huge NPAs in this segment.
Most state-run banks will be benefited from relaxation of the norms, the bank official said. High NPAs were a major cause of concern to the Delhi-based PNB. The bank's net NPAs rose to 1.33 per cent in October-December from 0.42 per cent a year ago.
Chairman and Managing Director K C Chakrabarty had said at the time of announcing Oct-Dec results that the bank aims to bring down net NPAs below 1 per cent by the end of March. PNB targets net profit of Rs 300-400 crore in January-March, he had said.
