There will be an increase in NPA calculation from current levels: M&M Financial's Ramesh Iyer

He added that vehicle availability is an issue with original equipment manufacturers (OEMs) and one would be able to maintain margin at current levels.

On November 12, RBI gave a clarification on the income recognition, asset classification and provisioning IRAC norms for banks and NBFCs and All India Financial institutions (AIFIs). The key points included the classification of special mention accounts (SMAs) and non-performing accounts on a day-end basis, upgrade to an NPA to standard category only after the clearance of all outstanding dues and harmonisation of out-of-order status of cash credit (CC)/overdraft accounts and the treatment of delays in interest payment on a nine-day overdue basis.

This means that NPAs can only be moved to the standard category if all the remaining dues are cleared by the borrower. The move, however, is unlikely to affect NPAs of regular banks that already comply with these norms.