Coronavirus impact: Banks seek clarity over new NPAs worth Rs 50,000 crore: Report

State-run lenders have taken up with the Centre their worries over Rs 50,000 crore worth of loans turning into non-performing assets (NPAs) for March, the Business Standard has reported.

Loans overdue for over 90 days are classified as NPAs. On April 17, the Reserve Bank of India (RBI) said the moratorium period will be excluded from NPA classification.

Follow LIVE updates on the COVID-19 pandemic here

On March 27, the central bank had announced a three-month moratorium on term loans whose payments were due between March 1 and May 31. The moratorium is intended to provide borrowers relief during the nationwide lockdown.

"The borrowers, which were classified as special mention accounts-2 (SMA-2), turned into NPA worth over Rs 50,000 crore by the end of March for the entire banking system. These were accounts mainly belonging to the micro, small and medium enterprises (MSMEs)," a chief executive officer of a PSB told the Business Standard.

Moneycontrol could not independently verify the story.

Also read: Shaktikanta Das' silence on loan moratorium for NBFCs may spoil the liquidity party

The PSBs also sought clarity whether borrowings by NBFCs were part of the moratorium, the report said.

"The NBFCs somehow could manage in March but they are feeling the pressure in this month and May would become even more difficult," a banker told the paper.

Announcing more liquidity-easing measures on April 17, the RBI said, "NBFCs have flexibility under the prescribed accounting standards to consider such relief to their borrowers.” The central bank, however, did not specify if loans taken by NBFCs from banks are included in the moratorium.