As per report Securities and Exchanges Board of india, SEBI, has now asked banks to disclose loan divergences within 24 hours of their having received the report from RBI. Meanwhile this is meant for banks whose stocks are publicly traded and hence this is meant to keep the shareholders of the banks in the loop as to what is happening with the loan portfolios of the banks instantly and not to wait till the bank reports them along with their annual reports, as has been happening so far.
Furthermore SEBI has directed the banks “to make disclosures of divergences and provisioning beyond specified threshold not later than 24 hours upon receipt of the Reserve Bank’s Final Risk Assessment Report” reportedly SEBI has said the assessment report by the regulator is price-sensitive and has to be brought to the knowledge of the shareholders immediately. Furthermore as per RBI’s instructions to banks information about provisioning, if in its assessment the additional provisioning exceeded 10% of a bank’s profit before provision, then contingencies have to be disclosed.
Apparently two years back, the SEBI had questioned three banks, Axis bank, ICICI bank and Yes bank for inadequate disclosures regarding divergences and provisioning. Moreover the banks responded by saying that bank OF INDIA' target='_blank' title='rbi-Latest Updates, Photos, Videos are a click away, CLICK NOW'>rbi had advised that the information on divergences was to be kept confidential and that was the reason for their non-disclosure.
