A possible reason for the rise in NPAs post-Q4 FY23 could be the way banks disclosed CGFMU and ECLGS in their books.In its Q1 FY24 analyst call, the management explained that since CGFMU was in the nature of insurance, it used to mark it as an NPA whenever the customer crossed 90 days past due. However, loans under ECLGS were not as government-guaranteed, and there was no payment of premiums.But things changed after the RBI released revised norms for Income Recognition, Asset Classification and Provisioning pertaining to advances.According to these rules, all loans granted under the NCGTC and Credit Guarantee Fund Trust for micro and small enterprises must be treated as NPA and banks are…
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Why Bandhan Banks Rs 23,300-Crore Credit Guarantee Portfolio Is Under Audit — Exclusive
