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Provisioning for future bad loans takes a toll on NBFC financials

Rs 34-bn net worth already impacted, shows analysis of 10 most valuable firms


Sachin P MampattaShreepad S Aute
Non-banking financial companies (NBFCs) appear to be under stress because of the new accounting rules.

The Indian Accounting Standard (Ind-AS) norms now require NBFCs to provide for losses on bad loans by anticipating future losses (expected credit loss, ECL) based on default probability, as opposed to waiting for loans to go bad as was the case under the earlier system.

The Reserve Bank of India (RBI) has postponed the implementation of the norms for banks by a year. However, NBFCs have started to follow it from the June quarter. They also provide reconciliation figures for the corresponding quarter of the

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First Published: Aug 29 2018 | 11:32 PM IST

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