The Reserve Bank of India (RBI) has withdrawn the circular that had asked the banks and financial institution to disclose their exposure to Infrastructure Leasing and Financial Services Ltd (IL&FS), and its group entities.
This comes in a wake of the last week order by the National Company Law Appellate Tribunal (NCLAT) , that had allowed banks to declare defaulting loans of IL&FS and its group companies as bad loans.
The RBI said in a notification that, “In view of the NCLAT order dated May 2, 2019, 2019 in respect of Company Appeal (AT) No. 346 of 2018 and I.A. No. 1139 of 2019, the instructions contained in the April 24, 2019 circular stand withdrawn”.
The central bank had earlier said that the banks must disclose details, including total amount of exposure that are non-performing assets (NPAs) as per Income Recognition and Asset Classification (IRAC) norms, but not classified as NPA.
These banks must also reveal the provisions required to be made and the provisions actually made by the banks, RBI had said.
As per the RBI IRCA norms, a loan where repayment has not been done for more than 90 days should be classified as NPA and the 15 percent of the outstanding loan has to be set aside as provisions in the first year.
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 has withdrawn the circular that had asked the banks and financial institution to disclose their exposure to Infrastructure Leasing and Financial Services Ltd (IL&FS), and its group entities.){kind=link}