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Mumbai, Nov. 3: Banks have asked the Reserve Bank of India to extend the relaxation in provisioning norms for restructured loans beyond April next year.
At present, banks have to set aside lower capital on accounts that have been restructured — only 5 per cent of the loan value. However, from April 1, 2015, they will have to provide at least 15 per cent on such accounts.
Vijayalakshmi Iyer, chairperson and managing director of Bank of India, while announcing the bank’s second-quarter numbers, indicated that the lenders had informally asked the central bank to defer the deadline.
During the second quarter ended September 2014, Bank of India’s restructured assets rose to Rs 11,738 crore from Rs 10,602 crore in the preceding three months.
At ICICI Bank, assets worth Rs 11,020 crore were restructured during the second quarter, up from Rs 6,826 crore in the same period last year.
Bank assets have been under pressure for many months because of the slowdown in the domestic economy. Senior bankers have indicated that it would take at least two quarters for the situation to turn around.
Bank of India today met Street estimates by reporting a 26 per cent jump in net profit at Rs 786 crore for the three months ended September 2014 compared with Rs 622 crore in the same period a year ago.
The net profit rose on the back of a 13 per cent rise in net interest income at Rs 5,717 crore compared with Rs 5,064 crore in the year-ago period.