RBI audit 'busts' alleged under-reported bad loans of top banks 

In a quest to eradicate the bad loans sickness in banks, a recent RBI probe discovered YES Bank's alleged under-reported bad loans for the year 2016-17 in the company's annual reports. YES Bank had reported a total gross non-performing assets (NPAs) at 0.76 per cent for FY16, however, the RBI audit pegged the total NPA to five per cent for FY16.  

In a similar case, according to the brokerage major Credit Suisse, RBI audits also pegged the Axis Bank's NPAs at 4,5 per cent of loans for FY16 from a 1.78 per cent reported by the bank for the same period. Whereas, ICICI Bank's NPAs were reported as 7 per cent by the apex bank RBI against the ICICI Bank's report of 5.85 per cent.

 RBI had directed the banks to conduct an asset quality review in the third and the fourth quarter of FY16 resulting in a 70 per cent surge in their estimated gross NPAs in the period between September 2015 and March 2016.  

The Banks claim to have reduced their NPAs in FY17 through partial asset sales to asset reconstruction companies, improvement in account conduct and other remedial measures.   

However, the RBI assessed that the total NPA's of the banks were Rs 4,930 crore, whereas the banks had reported an aggregate of Rs 750 crore as their bad loans.