The RBI on Tuesday told the National Company Law Appellate Tribunal that banks will have to classify the accounts of debt-ridden IL&FS and its group companies as NPAs in terms of its master circular and the Supreme Court judgement.
It is the obligations of the banks to mark any loan as NPA after a default of 90 days, and they cannot be relieved from doing that, said the Reserve Bank of India, adding that it is a process which every bank has to follow.
Senior advocate Gopal Jain, representing the RBI, submitted before the NCLAT that true reflection in the books of the banks is important for fair accounting because it has early warning signals.
“The whole thing is to have a transparent and fair accounting system, so that the health of the institution is not affected.
According to him, the job of the regulator is to have right policy for all the banks.