Jammu & Kashmir Bank said that out of total divergence of Rs 884 crore in the year ended 31 March 2019, Rs 751 crore pertains to IL&FS Financial Services.
Shares of Jammu & Kashmir Bank (J&K Bank) were trading lower by 0.83% to Rs 29.75 at 15:05 IST on BSE. The stock moved in a range of Rs 30.60 and Rs 29.75 so far during the day.
Meanwhile, the S&P BSE Sensex was down 306 points or 0.74% to 41,155.04.
On the BSE, 59,406 shares were traded in the counter so far compared with average daily volumes of 56,061 shares in the past two weeks.
The stock hit a 52-week high of Rs 65.95 on 10 April 2019. The stock hit a 52-week low of Rs 29.40 on 16 December 2019.
J&K Bank said that a divergence of provisioning shortfall was reported by the bank to Sebi. The divergence predominantly pertains to IL&FS Financial Services (IFIN), a 100% subsidiary of IL&FS. Out of Rs 884 crore of the total shortfall of NPA provisioning in the year ended 31 March 2019, Rs 751 crore pertains to IFIN which constitutes around 85% of total NPA provisioning reported under divergence. The bank has already made provision of Rs 54 crore upto 30 June 2019.
The divergence is the difference in bad loans reported by the bank and the assessment done by RBI. According to recent guidelines by the Securities and Exchange Board of India (Sebi), banks are now required to disclose divergence in the asset classification and provisioning immediately upon receipt of RBI's final Risk Assessment Report (RAR).
J&K Bank functions as a universal bank in Jammu & Kashmir and as a specialised bank in the rest of the country. It is also the only private sector bank designated as RBI's agent for banking business, and carries out the banking business of the Central Government, besides collecting central taxes for CBDT.
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