Mumbai: The Securities and Exchange Board of India (Sebi) has asked banks to disclose any material divergences in their non-performing assets on a continuous basis. In a circular issued on Thursday, the market regulator said banks must disclose such information within 24 hours of the receipt of the Reserve Bank of India’s risk assessment report.

Currently, such divergences are disclosed by banks in their quarterly financial results. The new rules will apply to situations where the additional provisioning for NPAs assessed by the RBI exceeds 10 per cent of the reported profit before provisions and contingencies.

The disclosure rules will also apply if the additional gross NPAs identified by the central bank exceed 15 per cent of the published incremental gross NPAs for the reference period. “These disclosures in respect of divergence and provisioning are in the nature of material events/ information and hence necessitate immediate disclosure,” said the Sebi circular.

“Further, this information is also price-sensitive, requiring prompt disclosure.” These new provisions have been brought by the regulator to align its rules with those of the RBI.

The central bank had issued new regulations for disclosure of divergence in asset classification in April.

Previously, banks were required to disclose divergence if the provisioning needed was more than 15 per cent of the net profit.

The RBI lowered this to 10 per cent in an April circular and Sebi has incorporated this in its new rules. In 2017-18, several leading banks reported divergence in NPAs in terms of their own assessment compared with the RBI’s assessment.

These discrepancies were disclosed in the quarterly results and the share prices fell sharply in response to the disclosure, prompting Sebi to consider changing the framework. In order to bring more transparency in terms of NPA disclosures, Sebi had issued a circular in 2017 asking all listed companies to disclose any loan defaults within 24 hours of the event.

Some of the leading banks opposed the circular, forcing the market regulator to withdraw it.