The RBI has declined a request by banks for a ‘standstill’ of six months on the classification of their exposure to the beleaguered IL&FS Group.
The Indian Banks’ Association had sought this pause as lenders were prohibited by the NCLAT from initiating recovery action against the IL&FS Group.
Rejection of the request to maintain ‘standard’ classification means banks will have to start making provisions, probably even in their third-quarter results, towards their exposure to the group.
Banks have about Rs ₹50,000 crore exposure to the IL&FS Group. Overall, the Group has debt of about Rs 90,000 crore.