Recall that a similar exercise for fiscal year 2016 (FY16) had thrown up substantial divergences between RBI and banks on bad loans. Then, ICICI Bank had underreported bad loans to the tune of Rs5,105 crore for FY16, according to the RBI report. This, coupled with a decent loan growth of 12.8%, kept bad loan ratios under check. While bad loan accretion slowed, so did recoveries and upgrades, and this means all is not rosy. Investors would do well to hold their horses on rerating its stock until the bank passes the regulator’s litmus test on bad loans.

Source: Mint October 27, 2017 18:00 UTC