Previously, banks with listed specified securities, were required to disclose to the stock exchanges, divergences in the asset classification and provisioning wherever the additional provisioning requirements assessed by RBI / the additional Gross NPAs identified by RBI exceeded a certain threshold. This was derived from RBI’s Notification in the year 2017, which required listed banks to make disclosures in the asset classification and provisions in the “Notes to Accounts” to the Financial Statements.
RBI has further modified the disclosure requirements varying the aforesaid thresholds. Hence in light of the newly revised RBI requirements, SEBI vide Circular No. CIR/CFD/CMD1/79/2019 has directed all such banks to disclose to the stock exchanges divergences in the asset classification and provisioning, if either or both of the following conditions are satisfied:
- The additional provisioning for NPAs assessed by RBI exceeds 10 per cent of the reported profit before provisions and contingencies for the reference period, and
- The additional Gross NPAs identified by RBI exceed 15 per cent of the published incremental Gross NPAs for the reference period.
However, other requirements specified in the previous circular remain unchanged. The Board has also advised the stock exchanges to bring the above-mentioned provision to the notice of banks which have listed specified securities and to disseminate the same on their websites.
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