IDBI Bank’s provisions and contingencies declined sharply from Rs 5,641.32 crore in Q2FY20 to Rs 581.15 crore in Q2FY21. In fact, it actually reversed provisions worth Rs 164.6 crore for non-performing assets in Q2. Its provision coverage ratio stood at 96 per cent in September 2020.
As for Covid impact and provisions, the bank said it has, as a prudent step, made a provision of Rs 270 crore for cases to be restructured under the Resolution framework. RBI has issued rules for restructuring debt–-personal, MSME and corporate-–impacted by Covid-19-related stress.
Also, in line with the Supreme Court judgement, the bank has not classified accounts that could have slipped into default, as NPA after the end of the moratorium on August 31. It has however maintained provision against them under standard assets provision.
Had the bank classified borrower accounts as NPA after August 31, its proforma Gross NPA ratio and proforma Net NPA ratio would have been 25.2 per cent and 2.81 per cent respectively.
Gross NPA improved to 25.08 per cent at end of September 2020 from 29.43 per cent a year ago and 26.81 per cent as on June 30, 2020.
The Net NPA ratio improved to 2.67 per cent from 5.97 per cent as on September 30, 2019 and 3.55% as on June 30, 2020.
The Provision Coverage Ratio (including Technical Write-Offs) improved to 95.96 per cent in September 30, 2020 from 91.25 per cent a year ago and 94.71% as on June 30, 2020.
Capital Adequacy Ratio (CAR) was 13.67 per cent 9tier I 11.06 per cent) at end of Q2Fy21, up from 11.98 per cent a year ago (Tier I of 9.52 per cent in September 2019).
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