RBI asks Banks for the Disclosure of IL&FS NPA Details

Published on April 27, 2019
The Reserve Bank of India (RBI) has asked banks and financial institutions to disclose the non-performing assets (NPA) stemming from their exposure to troubled infrastructure conglomerate Infrastructure Leasing & Financial Services Limited (IL&FS) and its group entities in their upcoming results announcements.
RBI asks Banks for the Disclosure of IL&FS NPA Details

Details:

  • RBI said that the new directions are as per the order of the National Company Law Appellate Tribunal (NCLAT), which asked banks not to declare their loans to the company and group as NPAs.
  • The banking regulator has, therefore, asked the lenders to disclose details such as the provisions required for such NPAs and also the actual provisions made, in their Notes to Accounts in the financial results.
  • It has prescribed a disclosure format for this purpose.

One must know:

  • An account becomes non-performing if repayment is due for more than 90 days.
  • Banks have to set aside capital as provisions for NPAs.
  • Banks and financial institutions have to disclose the information in a particular format as prescribed by the banking regulator.

About the NCLAT's order:

  • No financial institution will declare the accounts of Infrastructure Leasing & Financial Services Limited or its entities as NPA without prior permission of this Appellate Tribunal.

Question:

Q. Who has asked banks and financial institutions to disclose the non-performing assets (NPA) stemming from their exposure to IL&FS in their upcoming results announcements?
a. NCLT
b. SEBI
c. Ministry of Finance
d. RBI

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