Canara Bank's gross NPA divergence Rs 507 crore for FY16

Public sector Canara Bank on Friday reported a divergence of Rs 507.30 crore in its gross non- performing assets (NPAs) for 2015-16.

The bank's gross bad loans stood at Rs 31,637.83 crore as on March 31, 2016, Canara Bank said its annual report for 2016-17. The RBI assessed the bank's gross NPAs at Rs 32,145.13 crore, higher by Rs 507.30 crore than the bank's estimates, as on March 31, 2016, the report said.

In April, the RBI directed banks to disclose the divergence in their asset classification and provisioning from that assessed by the central bank in their annual reports.

The divergence in net NPA estimates of Canara Bank was Rs 30.15 crore for 2015-16. The bank assessed its net NPAs at Rs 20,832.91 crore while the RBI's assessment was Rs 20,863.06 crore.

Provisions for NPAs by the bank were at Rs 10,745.17 crore on March 31, 2016, while the RBI assessed these at Rs 11,282.07 crore, resulting in divergence of Rs 536.90 crore.

For fiscal 2015-16, the Bengaluru headquartered bank had reported a net loss of Rs 2,812.82 crore.

Taking into account the divergence provisioning of Rs 536.90 crore, the adjusted net loss of the bank rose to Rs 3,349.72 crore for the fiscal ended March 2016.

For the last fiscal ended March 2017, Canara Bank said its provisions towards standard assets rose to Rs 1,438.60 crore from Rs 1,413.09 crore a year ago.

RBI's disclosure norms on divergence have been brought in to depict a true and fair view of banks financial statements as there were cases of "material divergence" in banks asset classification and provisioning from the RBI norms.

The apex bank assesses compliance by banks with extant prudential norms on income recognition, asset classification and provisioning (IRACP) as part of its supervisory processes.

RBI has specified certain criterion related to NPA assessment for banks to disclose the divergence.