No absolutely agree on that Sunil.
The challenge is that as per revised norms RBI reuires 5% upfront provisioning – the the point of disbursement. That on a perfectly fine/healthy loan. See ECL model is based on “Expected credit loss” – so you make sufficient provision on the day any loan gets delayed or gets pushed into SMA 2. But the revised norms earlier suggested by RBI are beyond onerous.
The disclosures historically have been quite good as the management has always shared specific project details on NPAs etc. Also under no circumstances can a company keep classifiying a project as an NPA if it stops paying given all this is now much closely monitored by RBI.
To you earlier point reversal of provisions – these loans are of longer duration – 5/10Y – introducing such lumpiness creates a situation wherethese companies will start reporting EV/VNB like metrics in growth phase which doesnt make sense per my view.
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