Banks can ease a bit now as RBI cuts down the list of companies that required bad loan provisioning

The Reserve Bank of India (RBI) took some pressure off from the banks as it trimmed the list of firms that required bad loan provisioning.

State-owned banks were under pressure to expose the highly indebted corporate houses.

But, RBI struck off 20 firms and told banks that outstanding loans of these companies were not required in the March quarter.


These firms included names such as Jaiprakash Associates and Coastal Energen.

"On Wednesday, RBI issued a letter. Some of the companies are removed from the list and no new names have been added as yet," a banker told ET.

RBI, last year, had ordered an Asset Quality Review (AQR) and declared that lenders have to set aside funds against loans given to the 150 companies. But, now the list has been trimmed.


Banks had to make substantial provisions in the December quarter following the AQR, which revealed that a number of banks incurred losses.