Banks need Rs 18,000 cr to resolve 12 NPA accounts flagged by RBI: Ind-Ra
Indian banks need to provide a bare minimum of Rs 18,000 crore additionally towards 12 big-ticket bad accounts identified for insolvency resolution, says India Ratings and Research In June 2017, the Reserve Bank of India (RBI) had asked lenders to refer 12 identified accounts to the National Company Law Tribunal (NCLT) under the Insolvencyand Bankruptcy Code. The ratings agency estimated the current average provisioning towards these accounts at 42 per cent. The extra provisioning needed would reduce the profits of creditor banks by 25 per cent and reduce the return on assets by 12 basis points in the current financial year. Banks with average provisioning of 50 per cent on the 12 identified accounts may also need to provide additional funds to reach the new minimum required provisioning, which stands at 50 per cent towards each of the accounts. Some of the large bad loans being referred forinsolvency include Essar Steel, Bhushan Steel, Alok Industries, Lanco Infratech, and Am...