Sebi asks banks to explain bad loan under-reporting

Wants to ensure banks and auditors adhered to disclosure requirements; evaluating RBI status report

The Securities and Exchange Board of India (Sebi) is examining the conduct and quality of audits and disclosures at YES Bank, Axis Bank and ICICI Bank on their bad loans.The regulator has sought explanations from the private sector lenders on whether they adhered to disclosure requirements. The move comes after the Reserve Bank of India’s (RBI’s) report on huge divergence in actual non-performing assets and those disclosed by banks.

Axis Bank’s official spokesperson confirmed they had received a communication from Sebi in this regard and had already responded. “The financial statements of the bank are prepared in compliance with the extant