India's Biggest Lender, SBI Under-Reported INR 12k Crore of NPAs

In a filing to SEBI, State Bank of India stated that it had underreported bad loans of INR 11,932 crores in the last fiscal year. RBI directed that the bank will have to provide for additional bad loan provision, which in turn will show a loss of INR 6,968 crore in the books of SBI.

Crux of the Matter
  • RBI, in its review, noted that the State Bank of India had not reported INR 11,932 crores of non-performing assets (NPAs).
  • SBI’s reported gross NPA of INR 1,72,750 crores will have to be increased to INR 1,84,682 crores.
  • As a result, SBI will have to provision INR 12,036 crores for bad loans.
  • The balance sheet profit of FY 18-19 INR 86 crore will be reduced to a loss of INR 6,968 crores.

A non-performing loan (NPL) is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 90 days, but this can depend on the contract terms. In India, non-performing loans are common in the agricultural sector where the farmers can’t pay back the loan or the interest amount mainly as a result of losses due to floods or drought. More Info