Mumbai: Moving that will help banks reduce most of their non-performing assets (NPA) to Bad Bank, RBI has allowed loan accounts that are classified as fraud to the company’s reconstruction asset (ARC).
Previously, banks were prohibited from selling NPAs that were classified as fraud, which had made them burdened with resolution of several large accounts.
Banks are targeting to sell NPA RS 2 Lakh Crore to Bank Bad Bank or National Asset Reconstruction (NARCL) for recovery.
However, they have achieved obstacles in connection with accounts that have been classified as fraud, because they are not permitted to sell them.
RBI now allows banks to sell fraudulent accounts, provided transferes not connected with borrowers.
RBI also said that the responsibility of transfer in connection with sustainable reporting, monitoring, complaints submitting with law enforcement agencies and processes related to the complaint will also be transferred to the arc.
“Transfer of the loan against the bow, however, does not free up transfers from improving staff accountability as required under the instructions that still exist about fraud,” RBI said.
“Because of the forensic audit in all NPAs, in the past three years, the down payment of 3.83 lakh crore is declared a fraudulency.
Now, most of the NPAs will be available for sale to the ARC in general and specifically for NARCL if there is progress Large with a consortium loan, “said Hara Mishra, UV Arc, said.
According to the RBI in connection with large fraud, the average lag of the event between events and classification is 57 months.
This means that it is possible that some defaults have not been classified as fraud.
This will greatly reduce loans available for sale.
RBI data shows that in the FY21 3,501 loan account of RS 1.4 Lakh Crore classified fraud.
In the FY20 number is 4,608 account for Rs 1.8 lakh Crore while in FY19 2603 account with RS 64,539 Crore.
Some large accounts that have been classified as fraud by lenders including DHFL and IL & FS who underwent the RBI resolution process initiated and government initiation.
Another big account is Bhushan Power and Steel, which has been resolved by lenders and Cox and Kings, who are investigating.
The Bank of Baroda and PNB have classified Home Finance’s financial accounts as fraud but the same thing remains in the Delhi High Court.