November 01, 2019

Securities And Exchange Board of India Directs Banks To Disclose Bad Loan Divergences Within A Day Of RBI Report

[ By Bobby Anthony ]


The Securities & Exchange Board of India (SEBI) has directed all banks listed on stock exchanges to disclose any divergence in bad loan provisioning within 24 hours of receiving the Reserve Bank of India’s (RBI) risk assessment report, instead of waiting to publish details in their annual financial statements.

Incidentally, the capital market regulator has taken this decision after consulting the RBI, which is the banking sector regulator.

In its recent circular, the SEBI stated that disclosures about divergence and provisioning are in the nature of material events and hence necessitate immediate disclosure.

Such information is price sensitive and hence prompt disclosure is needed by all banks listed on stock exchanges, the SEBI circular stated.

It may be recalled that in April, the RBI had mandated banks to disclose information about provisioning, if in its assessment the additional provisioning exceeded 10% of a bank’s profit before provision and contingencies.

The RBI had also directed banks to disclose information if additional non-performing assets (NPAs) were more than 15% of their reported NPAs.

After the RBI directive, such divergences in asset classification were still being disclosed only in notes to accounts in annual financial statements of banks.

Related Post

latest News

  • Government Panel Plans To Allow Telecom Companies To Repay AGR Dues Over 20 Years To Ease Financial Stress

    Mukesh Ambani-owned Reliance Jio has written a letter to Union Telecom Minister Ravi Shankar Prasad urging him to reject a demand by its rival telecom...

    Read More
  • Justice S.A. Bobde nominated as NALSA Executive Chairman by President Ram Nath Kovind

    Justice S.A. Bobde of the SC has been nominated as Executive Chairman of the National Legal Services Authority (NALSA) effective March 7, 2019, by Pre...

    Read More
  • Criminal case filed against Whatsapp, Twitter and Tik Tok

    The Hyderabad Police cybercrime unit has slapped criminal cases against Facebook owned Whatsapp, Twitter and Tik Tok for allegedly spreading fake anti...

    Read More