Banks must flag bad loans as NPAs after 90-day default: RBI to NCLAT

Sixty-nine firms of the group have been classified under categories based on their ability to service routine debt obligations

The Reserve Bank of India (RBI) on Tuesday told the National Company Law Appellate Tribunal (NCLAT) that banks had an obligation to mark bad loans as non-performing asset (NPA) after the default of 90 days and that the lenders could not be relieved of the same.

The banking sector regulator has moved the NCLAT seeking a modification of its February 25 order in which the appellate tribunal had said that accounts of the Infrastructure Leasing & Financial Services (IL&FS) and its subsidiaries could not be classified NPAs without approval.

Reflecting such loans as NPA is important on the books of banks as