New NPA norms not to hurt Axis Bank too much, says CEO

Axis Bank chief Shikha Sharma has said the new NPA resolution framework issued by RBI came as a surprise, but sought to downplay its impact on the bank as it would have anyways made higher provisions under the new accounting norms.

The third-largest private sector lender had already factored in higher bad assets recognition and the resultant provisions due to migration to the IndAS, the newer accounting system due from

April 1, and therefore, it will be able to support credit growth even after setting aside more money, Sharma said.

“Transition would have involved some hit to our capital.

Some of that is already going to happen because of this

(RBI circular). Actually, the transition to the IndAS becomes easier because a part of that pain is already factored in,” she said here on Wednesday.

She referred to her bank’s recent announcement of raising over Rs 10,000 crore in core equity from Bain Capital and others and said the impact of migration to Ind-AS from the present accounting system was factored-in during the infusion.

“When we raised the capital, we had sized it for IndAs and for growth. Instead of the impact coming through under this new regime, a large part will come through this and we still have capital for growth,” she said.

The impact of migration to Ind-AS from the present accounting system was factored-in during the infusion