Integrated infrastructure finance company IDFC on Saturday said it has been granted the regulatory approval by the RBI to utilise Rs 2,500 crore non-distributable statutory reserves for creation of specific provisions against stressed assets.
“These additional provisions are being created after a careful examination of the stressed assets portfolio and in accordance with our philosophy of prudent risk management and transparency,” the company said in a regulatory filing with the Bombay Stock Exchange.
It added that these provisions are “far in excess of the regulatory requirement and exceptional in nature” as indicated in its investor call post the quarterly results for quarter ended June 30.
In an earlier filing with the bourse, the company had said that it will make additional provision during July-September quarter in the current fiscal year against coal and gas power assets.
The firm will become a bank by the end of the period.
“These additional provisions will be charged to the Statement of Profit and Loss in the current quarter resulting in a significant one-time loss for the period. However, this will not impact the distributable profits since an equivalent amount will be transferred from the non distributable Statutory Reserves, as approved by the Regulator,” it said in the filing.