PSB slippages may widen after new rules

As of December 2017, large corporate accounts of the top five PSBs had more than a quarter share in their gross advances

Axis Bank, a major private lender, reported slippages of Rs 165.4 billion during the March 2018 quarter, a major chunk of which came from the corporate segment on account of new rules about non-performing assets (NPAs) issued by the Reserve Bank of India on February 12, 2018. This could be a precursor to even larger slippages in public sector banks (PSBs), given their bigger exposure to large corporates and the pool of stressed assets.

According to an executive with Union Bank of India, it is going to be a big obligation to provide for slippages during the quarter mostly on