Even as the finance ministry and RBI have directed banks to migrate to the core banking solution and eliminate manual intervention while detecting NPAs in their books, several banks have been found using manual tools while managing bad assets.
Manual intervention implies recording of crucial data manually, which leaves room for data mismatch. Such mismatch results in an incorrect assessments of the NPA problem, bankers said.
“This issue needs to be addressed at the earliest and ICAI has brought it up with the authorities,” Amarjit Chopra, former president, ICAI told Hindustan Times.
From April 1, the provisioning requirements for restructured loans of banks has been raised to 5% from 2.75% by the RBI after the banking industry witnessed a significant surge in the level of bad debts.
Meanwhile, the government has asked banks to prepare regular reports on their NPA levels.
Further, the issue was also brought up at the recent meeting that finance minister P Chidambaram held with the chairmen of public sector banks.