Quite possible that SBI's provision for NPAs has increased: Mythili Bhusnurmath

In a chat with ET Now, Mythili Bhusnurmath, Consulting Editor, ET NOW, shares her views on SBI’s Q3 numbers. Excerpts:

ET Now: Your quick reaction to SBI's earnings?

Mythili Bhusnurmath: For any bank, it is always possible that while the total quantum of the NPAs remains unchanged and even as the percentage might be unchanged, within the NPA category, you have three different categories. They are sub-standard, doubtful and then loss assets. So as the NPA slips further and further down, what you initially thought was sub-standard might become doubtful and subsequently what you thought was doubtful might become complete loss assets.

So, as per the RBI provisioning norms, the quantum of provision keeps increasing as the asset becomes worse and worse in quality. So it is entirely feasible that the total quantum of the NPAs remains the same, but within the NPA categories, the quality of the assets keep shifting down. It is quite possible that the SBI provision has increased because within the NPA category, there has been a further slippage from sub-standard to doubtful and from doubtful to loss assets. So that is another possibility apart from the capital conservation and the counter cyclical ratios.