For FY16, IDBI bank had reported divergence of Rs 6816.60 crore in classification of non-performing asset (NPA) compared to RBI's assessment
The Reserve Bank of India has imposed a penalty of Rs 3 crore on IDBI bank for failing to comply with norms related to reporting of bad loans.
"The Reserve Bank of India (RBI) has imposed, through an order dated April 09, 2018, a monetary penalty of Rs 30 million on IDBI Bank Limited (the bank) for non-compliance with the directions issued by RBI on Income Recognition and Asset Classification (IRAC) norms."
For FY16, IDBI Bank had reported divergence of Rs 6,816.60 crore in classification of non-performing asset (NPA) compared to RBI's assessment. It also under-reported provisions towards such bad loans to the tune of Rs 2,061 crore.
Last month, the central bank levied a penalty of Rs 58.9 crore on ICICI Bank, the country’s largest private sector lender, for failing to adhere to its directives regarding the sale of securities from the held-to-maturity, or HTM, portfolio.
RBI had also earlier charged Indian Overseas Bank, Axis Bank, Yes Bank, IDFC Bank, IndusInd Bank and RBL bank for violation of the asset qualification and KYC norms laid down by the regulator.
In April last year, the RBI told banks to disclose bad loan divergence in their financial statements if it exceeded 15 percent.
The government-owned bank is already under Prompt Corrective Action (PCA) among 10 other banks, imposed by the RBI in May last year for breaching NPA levels and negative return on assets (ROA).
At the end of December 2017, IDBI Bank reported its gross NPAs at Rs 50,622 crore, 24.72 percent or almost a quarter of its total loans. Its net loss for the October to December period stood at Rs 1,542 crore.
The central bank said, "This penalty has been imposed in exercise of powers vested in RBI...taking into account failure of the bank to adhere to the aforesaid directions issued by RBI."
RBI is also said to have written a letter to the Finance Ministry expressing concerns over its poor financial health and that it may have under reported its NPAs in the previous financial year.
This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, RBI has said.