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Quote on RBI's extension of NPA classification norms: Shriram City Union Finance

16 Feb 2022 , 02:42 PM

The RBIs NPA recognition norm extension to Sep-22 will give some breather to NBFCs bottom line in Q4FY22. We believe it could have been helpful if the measures extending the revised asset classification and provisioning norms had come along with the RBI Circular issued on 12th November 2021. Most NBFCs have already absorbed the impact in their third-quarter FY22 results.

The clarification by RBI only defers the adoption of the new norms. Reversing of provisions already made, although now permitted is unlikely to be the route that NBFCs may follow due to accounting complexities. For Shriram City Union Finance there will be no impact since our loan book is already well provided for. Further, given the strength of our collection efficiency, we expect our delinquencies to progressively reduce in 2022.

The author of this article is Mr. YS Chakravarti, MD & CEO, Shriram City Union Finance

Related Tags

  • NBFC
  • NPA
  • RBI
  • Shriram City Union Finance
  • Shriram City Union Finance update
  • SHRMCITY
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