You are here: Home » Reuters » News
Business Standard

RBI asks IL&FS lenders to classify loans to firm as non-performing: sources

Reuters  |  NEW DELHI 

By and Nidhi Verma

NEW DELHI (Reuters) - The of (RBI) has asked lenders of (IL&FS) to classify extended to the firm as non-performing, two sources with direct knowledge of the matter told on Tuesday.

While the RBI decision does not come as a big surprise, it means IL&FS's lenders will have to set aside additional capital to provision for the soured

Bad at Indian banks reached a record $150 billion at the end of March, with state-run banks accounting for the lion's share. The huge pile of bad debt has hurt the bottom lines of state-run banks and hindered their ability to issue new loans.

In October, took control of IL&FS, after a string of defaults on debt obligations by the infrastructure financing and construction company spooked domestic markets.

IL&FS, which has a total debt of 910 billion rupees ($12.97 billion), has been trying to sell its assets to repay debt after several defaults forced the government to overhaul its management.

Government-owned firms, including and State of India, own nearly 40 percent of the company. Japan's has a 23 percent stake and 12 percent.

Apart from State Bank, its other Indian lenders include of Baroda, Punjab National Bank, and Union Bank of India, among others.

One of the sources said the RBI told the lenders to book the loans to IL&FS as non-performing assets in the December quarter.

The second source said the RBI's decision was conveyed to banks on Tuesday.

The RBI did not respond to an email seeking comment. SBI and other lenders were not immediately reachable for comment.

($1 = 70.1730 Indian rupees)

(Writing by Krishna N. Das,; Editing by Euan Rocha and Ed Osmond)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, January 08 2019. 22:36 IST
RECOMMENDED FOR YOU