Interactive discussion on 15th February clarification:

NPA recognition for trailing borrower payments by NBFCs

Looked sufficiently close enough, there is a confusion in every clarification! The RBI issued a “clarification” on February 15, 2022, with respect to the November 12, 2021 Circular, which in itself was a clarification. The circular pertained to a very important issue for NBFCs – NPA classification for loans where the existing past due payment status was less than 90 days, but the borrower had been classified as non-performing based on past delays of 90 days or more. This was a serious concern to NBFCs, as would be easily reflected in the reported Gross NPA ratios for Q3, FY22.

However, there are several issues that already seem to be raging, even on the 15th Feb. clarification. For instance, is it merely a leeway for system upgradation, or a permission for deferred implementation till Q2 of FY 23? Is the day-end recognition system also deferred, or for that, the system has to be in place in any case? With respect to multiple accounts of the same borrower, is there a possible deferred implementation of the point that all such accounts should be fully paid, in order to achieve upgradation as standard account. What is “out of order” in case of NBFCs? How do NBFCs take advantage of this, given the fact that most of them would have published their financial results by 15th Feb. anyway? What about the NPA policy – does that also undergo a change again?

We would want these and other issues conceding the 15th Feb. clarification to be discussed by way of an interactive small session, so as to take advantage of collective wisdom.

Date: February 17, 2022 | Time: 5:30 p.m. to 6:30 p.m. | Mode: Zoom, Youtube live

Registration fees: Free, direct entry. However, we will be able to accommodate only 90 participants on our zoom platform. Our colleagues will admit only those persons who are signing with their Company’s email id. Others may, of course, watch it live on Youtube.

Zoom link: https://us02web.zoom.us/j/85112869395

Youtube live link: https://www.youtube.com/channel/UCgzB-ZviIMcuA_1uv6jATbg/featured

Our analysis on the Feb. 15 clarification is available here: https://vinodkothari.com/2022/02/nbfc-npa-characterisation-a-reprieve-a-day-too-late/

Our previous discussions on the topic are available on youtube: