RBI's recent norms may spike NPAs for NBFCs, cautions ICRA
Zee News
ICRA said that the RBI's recent notification on income recognition, asset classification, and provisioning norms for banks, non-banking financial institutions, and all-India financial institutions may lead to a sharp spike in the non-performing assets (NPAs) for non-banking finance companies.
New Delhi: The Reserve Bank of India`s recent notification on income recognition, asset classification, and provisioning norms for banks, non-banking financial institutions, and all-India financial institutions may lead to a sharp spike in the non-performing assets (NPAs) for non-banking finance companies, ICRA said.
On November 12, the central bank had said that classification of special mention accounts and non-performing accounts should be done on a day-end position basis and upgraded from an NPA to standard category only after clearance of all outstanding overdues.
These new norms will impact on earnings performance of such entities which would be visible over the next few quarters, if the forward flows into the NPA category are not contained, the ratings agency said.
