Central Bank of India said the Reserve Bank of India has found that it has under-reported bad loans by Rs 2,565 crore in the year ended 31 March 2019.
The divergence is the difference in bad loans reported by the bank and the assessment done by RBI. Central Bank of India had reported a net loss of Rs 5641.48 crore in the year ended March 2019. The adjusted (notional) net loss for the year ended 31 March 2019 after taking into account the divergence in provisioning was at Rs 6430.48 crore.According to recent guidelines by the Securities and Exchange Board of India (Sebi), banks are now required to disclose divergence in the asset classification and provisioning immediately upon receipt of RBI's final Risk Assessment Report (RAR).
For the year ended March 2019, the gross non-performing assets (NPAs) assessed by RBI was at Rs 34,921.04 crore compared with Rs 32,356.04 crore in gross NPA reported by the bank.
The bank had reported Rs 11,333.24 crore net NPAs during the year while the RBI assessed it at Rs 13,898.24 crore, leaving a gap of Rs 2,565 crore. The divergence in provisioning also increased by Rs 788 crore for the fiscal ended March 2019. The announcement was made after market hours yesterday, 19 November 2019.
Shares of Central Bank of India fell 0.66% to Rs 22.60 on BSE. The stock was trading in the range of Rs 21.85 to Rs 23.90 so far during the day.
The S&P BSE Sensex was up 310.03 points or 0.77% at 40,779.73.
In the past one month, the stock rose 31.77% to its current trading price of Rs 22.60 outperforming the Nifty PSU Bank index which rose 15.38% to its current 2,608.95.
Central Bank of India reported a net profit of Rs 134.07 crore in Q2 September 2019 compared with net loss of Rs 923.60 crore in Q2 September 2018. Total income rose 8.2% to Rs 6,703.71 crore in Q2 September 2019 over Q2 September 2018.
As of 30 September 2019, the Government of India held 369.11 crore equity shares or, 89.46% stake in the bank.
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