In view of mounting bad loans eating into banks’ profits, RBI has allowed them to exclude from provisioning stressed loans of certain companies in the fourth quarter numbers. This will help ease burden on banks to some extent and support their bottomline.
About two dozen companies which have been trying to repay loans by selling their assets or some of their subsidiaries have been excluded from defaulters list.
“After reviewing accounts which were under asset quality review, RBI felt some of the accounts can be standardised. They have asked banks to make them standard,” said a senior bank official from a state-run bank. RBI has communicated about the exclusion to banks, sources said, adding that some of the companies falling under the category include Jaiprakash Associates ltd. last month, Jaiprakash Associates completed the sale of a majority of its cement business to Ultratech Cement for Rs15,900 crore.