Though RBI had asked banks to conduct an asset quality review in Q3 and Q4 of FY16, some private bank it seems tried to under report their bad assets.
In a recent audit by RBI, Yes Bank’s total gross non performing assets was calculated at 5% for FY16, rather than 0.76% assessed by the bank itself.
This came to light after the bank made a disclosure of it in its 2016-17 annual report. This has increased the gross NPA of Yes Bank to Rs 4930 crore at the end of FY 2016 as against Rs 750 crore declared by the bank at that time.
The Yes Bank spokesperson said, “The disclosure on divergence in asset classification and provisions in NPAs in the annual audited financial statement is in conformity with the RBI circular issued on April 18, 2017.”
Yes Bank is the second big private sector bank to do some rigging in NPA figures. Earlier reports from ICICI bank and Axis Bank’s analyst conference said that the NPA figures of both the banks are not in line with what RBI audit suggested. Though both Axis and ICICI Bank are yet to release their annual reports, the RBI audit suggests heavy discrepancy in numbers.
The NPA of Axis bank is said to be around 4.5% rather 1.78% reported and ICICI NPA figures are to be around 7% rather 5.85% reported.
The shares of all the banks have taken a dive, with more collateral damage expected if the trend continues in the next financial year results.