RBI trims list of firms needing bad loan provisioning, says Paper

The apex bank had communicated its decision to banks via individual letters sent on Wednesday

The Reserve Bank of India (RBI) has trimmed the list of companies whose loans need to be provided for against the risk of default, The Economic Times newspaper reported on Thursday, citing three people with knowledge of the matter.

The RBI has dropped 20 companies including Jaiprakash Associates Ltd and Coastal Energen Pvt Ltd from the initial list of 150 firms for which banks were asked make provision, the newspaper said.

Read more from our special coverage on "RBI"

• Bad loans provisioning: ICICI Bank, SBI to benefit most, say analysts
• RBI asks banks to trim list of firms that need NPA provisioning
• Net transfer to states would fall on halt of some schemes: RBI
• Letters: Window dressing
• RBI tweaks rules on bank fraud provisioning to ease burden

The move, prompted by steps taken by companies to cut their debt, is likely to result in better-than-expected March quarter results at banks, especially those with high exposure to heavily indebted companies, the newspaper said.

The central bank had asked lenders to treat some troubled accounts as bad loans and make adequate provisions for such loans during the December and March quarters as part of a clean-up exercise.

The RBI communicated its decision to banks via individual letters sent on Wednesday, the newspaper said.