RBI Inspection Report on BoB Reveals Financial Divergence Worth Rs4,512 Crore in 779 Accounts
Moneylife Digital Team 21 May 2022
The inspection report of Bank of Baroda (BoB) for 2019, inadvertently shared by Reserve Bank of India (RBI), reveals financial divergence in as many as 779 accounts. As per the report, there was a shortfall or additional provision worth Rs4,512 crore that was required in these accounts.
This report is part of an application under the Right to Information (RTI) Act filed by Mumbai-based Girish Mittal. While the central public information officer (CPIO) and first appellate authority (FAA) wants to share RBI's inspection reports, banks and financial institutions have taken the matter before the Supreme Court as well as the central information commission (CIC). (Read: Bank Inspection Reports: 'Undecided' CIC Asks CPIO & FAA To Take Own Decision on Disclosing Information under RTI
As per the information shared under RTI, BoB reclassified six borrower accounts of standard loan worth Rs5,250 crore as non-performing assets (NPAs). It caused a shortfall of Rs836 crore. Similarly, the lender re-classified short provisions of NPAs, which were existing NPA accounts. There were 27 such accounts with outstanding of Rs10,983 crore. BoB's action caused a shortfall of Rs3,254 crore, the RBI report shows.
Further, there was shortfall of Rs383 crore in standard asset provisioning. BoB had mentioned the outstanding as Rs8,352 crore in 743 accounts. Additionally, there was a debt asset swap, in which the lender has shown a shortfall of Rs39 crore in three accounts that have an outstanding of Rs510 crore. 
The RBI report also found divergence of Rs685 crore in risk weighted assets (RWAs) of Bank of Baroda. "Auto loans (non-commercial) classified under regulatory retail portfolio were re-classified under consumer loans. Correct external rating was applied. Commercial real estate-residential housing (CRE-RH) loans reclassified as CRE. Rs6,006 crore of reduction of RWA due to asset re-classification," remarks in the inspection report say.
Giving one such example, RBI points out the interest in the loan account of RKM Powergen Pvt Ltd was not serviced from 29 November 2014. "However, the bank had been servicing the interest on its own to keep the account as standard and thereafter was making provisioning towards the same. As of 31 March 2019, the provisioning held towards the interest portion was Rs434.18 crore."
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