Recently,three state-run banks had reported divergence in bad loan recognition while announcing the results. Divergence takes place when the Reserve Bank of India (RBI) finds that a lender has under-reported (or not reported at all) bad loans in a particular year and hence asks the lender to make disclosures if under-reporting is more than 10%… Continue reading RBI now uses divergence to compel banks to improve their loan-loss ratios
Tag: NPA divergence
RBI tweaks NPA divergence disclosure norms
The Reserve Bank of India (RBI) has said that banks should disclose Non performing assets(NPA) divergences if there is a more than 10% difference in their assessment of bad loans versus that of the regulator. The divergence in non-performing assets is the difference between the central bank’s assessment and the bank’s reported non-performing loans. Earlier,the… Continue reading RBI tweaks NPA divergence disclosure norms
