EY launches NPAccurate
Mumbai, 07 March 2016
The banking and financial services industry is going through a churn because of rising non-performing assets (NPAs). With a number of measures launched and proposed by the regulator, banks will have to start cleaning up their balance sheets as they attempt to curb the amount of stressed assets in their portfolio. To help the industry with the process, EY Fraud Investigation & Dispute Services has launched an automated tool, ‘NPAccurate’, which allows banks to assess the level of clean up required by the deadline of 31 March 2017. The tool would enable banks to identify vulnerabilities and inconsistencies in loan portfolios through comprehensive dashboards.
The tool is equipped with a unique risk scoring intelligence mechanism that will allow senior management to efficiently evaluate top vulnerable branches and customer accounts. In addition, the tool has the flexibility of integrating with most of the core banking systems (CBS) used by banks.
Arpinder Singh, Partner and Head - India and Emerging Markets, Fraud Investigation & Dispute Services, EY said, “The banking sector is inundated with an exponential rise in stressed assets. The regulator has therefore, tightened their grip on the sector, with the rationale that banks should come clean at the earliest and not postpone the situation any further. With the March 2017 deadline closing in, bankers will have to deploy innovative tools such as NPAccurate to take care of their loan portfolios. We have devised this tool and invested heavily in developing its intricate functions and are already seeing a significant demand as the industry gears up to navigate through these testing times.”
The demand for such tools and techniques is expected to see an upsurge, especially since a list of 150 companies comprising accounts (where the corporate debt restructuring has either failed or that have been categorized differently by banks - some categorized as non-performing assets while others continuing as standard accounts) have been circulated to the banks for appropriate action.
Vikram Babbar, Executive Director, Fraud Investigation & Dispute Services, EY, said, “The situation is set to worsen as banks get ready to finalise results for the current year, ending March 2016. Some of the large public sector banks have already reported a spike in the bad loans for the December quarter. The next one year would comprise a greater level of introspection on the banks part. It is imperative for banks to identify the level of inconsistencies in NPA identification process and also the extent of clean up required at their end to meet the deadline set by RBI”
NPAccurate can assist banks by,
- Assessing the extent of efforts required to clean their books to meet the deadline of 31 March 2017
- Identifying vulnerabilities and inconsistencies in loan portfolios
- Correctly classifying performing and non-performing assets, with appropriate provisioning
- Displaying a comprehensive dashboard of NPA positions, which is accessible to the banks senior management
Currently, EY Fraud Investigation & Dispute Services has a 150 member team focused on the banking sector. The team includes Chartered Accountants (CAs), Certified Fraud Examiners (CFE), former RBI officials and senior bankers, former police officers and people who have years of experience in dealing with high value frauds/ investigations in banking and financial services.
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About EY’s Fraud Investigation & Dispute Services (FIDS) practice
Dealing with complex issues of fraud, regulatory compliance and business disputes can detract from efforts to succeed. Better management of fraud risk and compliance exposure is a critical business priority — no matter the industry sector. With our more than 4,200 fraud investigation and dispute professionals around the world, we assemble the right multidisciplinary and culturally aligned team
to work with you and your legal advisors. And we work to give you the benefit of our broad sector experience, our deep subject matter knowledge and the latest insights from our work worldwide.