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Nitin Sethi @nit_set
, 9 tweets, 3 min read Read on Twitter
#Thread on #NPAs. Stay with me.

RBI revealed this in an RTI: At the end of March 2018, a record high 7,990 borrowers of above Rs 5 crore had not repaid a whopping Rs 3.71 lakh crore to banks for 1-30 days after due date. That is a four-year high record of early defaulters! 1/n
2/n. These early defaults rose by a record 281.9 per cent over December 2017 when they stood at only Rs 972 billion . On a year-on-year basis, the rise is almost 228 per cent - the highest growth of early stage overdue repayments in 4 years.
3/n. More than 5,000 of these 7,990 were new and unique early defaulters of loans above Rs 5 crore. What does this number tell us? We have been told that all bad loans are of UPA era. This number tells us that Modi govt might be brewing its own banking crisis as well.
4/n. So, under RTI Act, I asked the RBI to give me the data on 'Special Mention Accounts' or SMAs. It does not reveal the gross numbers of these accounts on its own. There is no reason why it shouldn't. Even under RTI, the RBI would not give the numbers bank-wise.
5/n. Borrowers above Rs 5 cr who have not paid back the banks for 1-90 days are called SMA. Out of this SMA0 are borrowers who have not paid back for 1-30 days. If they continue to default these accounts become SMA1, then SMA2 and eventually NPAs or bad loans.
6/n. RBI releases a Financial Stability Report every six months. The last report confirmed in percentage terms that the SMA0 shot up by crazy levels. But, we did not know the real gross numbers till now. And, they are shocking. Read relevant extract of RBI's reply to RTI here
7/n. Not all SMA accounts will become NPAs or bad loans. But significant numbers will, notes CIBIL, the credit agency that keeps a even bigger database than RBI. And its recent Iceberg report cites even bigger numbers of early defaulters and unacknowledged NPAs.
8/n. Why the sudden spurt - RBI forcing banks to reveal the real situation? Hit from GST to trade and manufacturing? We don't know because the government is busy spinning tales & blame. And of course, if you are a bhakt economist you can call this RTI-based data as fake news.
n/n. If you read till here, thank you. I understood a lot of this info through discussions with my colleagues @ishan_83, @akwaghmare + many others who remain unnamed. Amidst a lot else that is happening, thought of putting it out before it gets dated. Back to work now. END.
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