(NDTV)
In April, the Reserve Bank of India advised banks to closely monitor loans to telecom operators after Airtel, Vodafone and Idea got caught up in a price war with Reliance Jio. The apex bank had asked banks to consider setting aside higher provisions for loans in stressed sectors by June 30. The advisory is part of RBI’s efforts in the past year to address the problem of non-performing loans more proactively and highlighted the growing concern among policy makers that banks are yet to fully identify their bad loans.
With Indian banks sitting on about Rs. 7 lakh crore in bad loans, experts say that RBI is calling for extra disclosure on asset categorization so that banks are more proactive on flagging down stressed assets as non performing. This is being done to improve governance and smoothen transition to Indian Accounting Standards (IND-AS 109), India Ratings and Research (Ind-Ra) said in a note.
