Even as its petition is pending at the NCLAT seeking a review of the ban on banks classifying the IL&Fs accounts as NPAs, the Reserve Bank Wednesday directed lenders to disclose their exposure to the bankrupt infra lender in their forthcoming earnings announcements.
The city-headquartered infra lender and its 348 group companies owe over Rs 94,000 crore, of which over Rs 54,000 crore is owed to banks. It began defaulting on repayment commitments from last August, and in October the government superseded its board and appointed a new board under banker Uday Kotak.
In a notification, the central bank said the new directions are as per a February 25 order of the National Company Law Appellate Tribunal (NCLAT), which asked banks not to declare their loans to the company and group as NPAs.
"No financial institution will declare the accounts of IL&FS or its entities as non-performing assets without its prior permission," NCLAT had said.
The RBI moved the review petition on March 19 and a decision is pending now as the tribunal had sought corporate affairs ministry's views to the RBI demand.
Earlier this month, reacting to the NCLAT order, governor Shaktikanta Das had said apex bank had filed a review petition seeking a modification of the previous NCLAT order.
In the notification, RBI has asked banks to disclose the IL&FS and group entities exposure in the notes to accounts in a standard proforma.
The lenders will have to mention the outstanding position on a particular date and give details including overall outstanding and amount which is NPA as per the income recognition and asset classification norms but not classified as NPAs, it said.
They will also have to specify the total provisions which are required to be made as per these norms for the assets and the provisions actually held.
A majority of lenders are yet to report their quarterly and full-year accounts for FY19. A slew of banks has hinted that exposures to IL&FS have impacted their profits in the past quarter as they made provisions towards this account.
Group entity IL&FS Financial Services had reported last month that its NPAs touched 90 per cent.
Media reports on RBI's decision to challenge the NCLAT order had said the insolvency court's decision was "tantamount to judicial overreach".
"The bankruptcy tribunal's order encroaches into RBI's regulatory domain and this could set a precedent if left unchallenged. These issues fall under the ambit of RBI as the regulator of the banking sector," a senior RBI official had said.