Non-Performing Assets or NPAs are on a rise in private sector banks. In last five years, private banks have recorded a 450 per cent jump in gross NPAs.
According to a report in the Indian Express, the gross NPAs of private banks have grown from Rs 19,800 crore in FY 2013-2014 to Rs 109,076 crore in March 2018.
Among the banks that have accumulated a massive rise in bad loans are ICICI Bank, Axis Bank, HDFC Bank, Kotak Mahindra Bank, Federal Bank and Yes Bank.
ICICI Bank topped the NPA list with Rs 54,063 crore in bad loans. It has recorded a 514 per cent jump in NPAs in five years - from Rs 10,506 crore in FY 2013-14 to Rs 54,063 crore in March 2018, the IE report said.
Axis Bank registered a 988 per cent jump in its bad debts in last five financial years. The Bank's bad loans have gone up from Rs 3,146 crore in FY 2013-14 to Rs 34,249 crore in FY 2017-18, the report said. The RBI had recently slapped a penalty of Rs 3 crore on Axis Bank for violations of NPA classification.
According to the report, HDFC Bank's bad loans jumped from Rs 2,989 crore to Rs 8,607 crore in the last five financial years. Kotak Mahindra Bank's gross NPA rose from Rs 1059 crore to Rs 3825 crore during the same period.
Yes Bank's NPAs went up from Rs 175 crore in FY 2013-14 to Rs 2627 crore in 2018. Last year, the RBI in a risk assesment found that Yes Bank had under-reported its NPAs by Rs 6350 crore.
Yes Bank is not alone in under-reporting NPAs. From ICICI to HDFC to Axis Bank, all have faced flak from the RBI for asset divergence. In March 2017, the RBI in its assessment had found that HDFC had under-reported its NPAs by Rs 2052 crore.
This year in February, the apex bank restructured the asset classification rules for early identification and reporting of NPAs. After the changes in rules, banks will now have to work out a resolution plan for defaults within 180 days.
Not only this, the regulator has also sought to reclassify loans given by a consortium as non-performing for all the lenders involved if it was considered non-performing on the books of one of them.
RBI Deputy Governor NS Vishwanathan had recently said that some banks were not following the rules of asset classification properly. He further said that the divergences used to happen earlier as well, but what has changed the narrative now is the mandatory disclosure of the divergences.
The top bank last year made it mandatory for the lenders to report if the difference between its disclosed numbers and the RBI's risk assessment findings exceed 15 per cent.