The state-run Oriental Bank of Commerce (OBC) on Saturday posted a loss of Rs 1,650 crore for its March quarter (Q4) after the bad loans soared owing to new RBI (Reserve Bank of India) rules.
The Oriental Bank of Commerce(OBC) bank had posted losses of Rs 1,218 crore in the year ago period (March quarter of 2017 fiscal).
The PSU (public sector undertaking) banks, already saddled by a near-record Rs 9.5 lakh crore of bad loans, have been expected to report a further rise in the March quarter after the Reserve Bank of India (RBI) withdrew loan restructuring schemes in its bid to expedite a clean-up of the books.At the time of announcing Q4 results, the bank on Saturday said in a statement, "The Government of India (GOI) has infused Rs 3,571 crores towards capital contribution for which the Bank has issued and allotted 28,65,97,110 equity shares on preferential basis on March 28, 2018 at an issued price of Rs 124.60 (including premium of Z 114.60).": HDFC Bank Q4 Results: Shareholders To Get Bonanza Dividend As Net Profit Jumps 20%The bank further stated in a stock market filing, "The financial results have been arrived at after considering provisions on standard assets, restructured assets, non performing advances, non-performing investments, depreciation on investments, provision for exposure to entities with unhedged foreign currency exposure and GSTregistered MSME borrowers on the basis of extant guidelines/directives issued by the Reserve Bank of India.Mark to market lossThe state lender said, "RBI vide its circular dated April 2, 2018 has permitted banks an option to spread mark to market loss on AFS HFT investment for quarters ended December 31, 2017 and March 31, 2018, equally over the four quarters commencing with the quarter in which the loss is incurred.
Accordingly, the Bank has charged depreciation of Z 194.75 crores related to quarters ended December 31, 2017 and March 31, 2018 and spread MTM losses to tune of Z 188.89 Crore to the subsequent quarters of ensuing financial year."