Mumbai, July 10 (IANS) State-run Punjab National Bank (PNB) has reported a borrowal fraud of Rs 3,688.58 crore in the NPA account of the now bankrupt Dewan Housing Finance Ltd (DHFL).
In a regulatory filing, the bank said that it has already made provisions amounting to Rs 1,246.58 crore.
"A fraud of Rs 3,688.58 crore is being reported by the bank to RBI in the accounts of the company (DHFL). Bank has already made provisions amounting to Rs 1,246.58 crore, as per prescribed prudential norms," it said.
Several other banks have already declared DHFL as a fraud account.
Last November, the Reserve Bank of India (RBI) superseded the Board of Directors of the company and appointed an administrator and accordingly, the board powers were vested in the firm's administrator.
Further, the Mumbai-bench of the National Company Law Tribunal (NCLT) at Mumbai commenced the CIRP against the company in December, following an application by the RBI.
The company reportedly has debt of around Rs 97,000 crore and has allegedly siphoned off Rs 31,000 crore from the total bank loans.
Its promoters Kapil Wadhawan and Dheeraj Wadhawan were arrested by the Central Bureau of Investigation in April.
New Delhi, Aug 8 (IANS) Public sector banks would need to increase their provisioning buffer factoring in the incremental provisioning requirement on restructured loans and potential NPAs, a report said.
To discourage rampant and unviable restructuring, the RBI has now mandated that banks will be required to make high provisions at 10 per cent on restructured retail/corporate loans (20 per cent on corp loans for banks outside inter-creditor agreement).
According to analysts, higher provisioning cost would deter unwarranted restructuring. But, this would put pressure on the PSBs to accelerate the pace of increasing their provisioning buffer or disallow restructuring, even in genuine case of stress due to the Covid-19 pandemic.
"Assuming Covid-19-induced stressed loans at 10-15 per cent and at least 50 per cent restructured in the worst case, our rough calculations show systemic level immediate additional provisioning cost at 10 per cent could be 50-75 bps," Emkay Global Financial Services said in a report.
This would mean certain banks would fare better while restructuring loans under stress owing to the pandemic. While ICICI/Axis carry contingent provisions of 125-130 bps, HDFCB/KMB/IIB/RBL have around 60 bps. But large PSBs have contingent provisions of just 10-15 bps.
"Thus, we believe that some banks may have to further accelerate their provisioning buffer, factoring in the incremental provisioning requirement on restructured loans and potential NPAs," Emkay said in its report.
The provision required for restructured loans, however, provides for reversal of 50 per cent of provisioning on retail loans in case the borrower pays 20 per cent residual debt, and the balance 50 per cent on payment of another 10 per cent without slipping into NPA.