Shares of City Union Bank fell 9% to Rs 172 in Wednesday’s intra-day trade on the BSE after the private sector lender said the Reserve Bank of India (RBI) found a gap of Rs 259 crore in additional gross NPAs for the financial year 2021-22 (FY22).

“The Reserve Bank of India has conducted an on-site inspection for Supervisory Evaluation (ISE) for the financial year 2021-22 from October 7, 2022, to November 18, 2022, and the last meeting concluded on December 19, 2022,” City Union bank said in an exchange filing on Tuesday after market hours.

According to its final report on risk assessment, the bank, among other things, has reported a total NPA variance of Rs 259 crore for the current financial year as per the said circular, the bank said.

The total difference of Rs 259 crore includes 13 borrower accounts (o/s balance > Rs 1 crore) of Rs 230 crore and 218 borrowers (o/s balance < Rs 1 crore) of Rs 29 crore, City Union Bank said.

The stock was down 7% at Rs 175.20 at 9:24 am, while the S&P BSE Sensex rose 0.42%. Average OTC volume jumped nearly 1.5 times, with a combined 5.2 million shares changing hands on the NSE and BSE.

Despite today’s sharp drop, City Union has outperformed the market over the past six months, gaining 46% compared with a 20% gain for the benchmark index. The stock touched a 52-week high of Rs 205 on December 15, 2022.

As of September 30, 2022, the outstanding restructured borrower accounts amounted to 1,772, totalling Rs 1,960 crore or 4.6% of the book, for which the bank had set aside Rs 160 crore and Rs 40 crore for the erosion of accounts. FV. Of the total, 62% of borrowers have already initiated repayments. The SMA 2 ledger of the OTR pool is around Rs 200 crore.

Regarding the SpiceJet account, the company has been making regular repayments of its dues, and interest has been repaid following the agreed schedule. Of the Rs 100 crore, Rs 17.5 crore has been repaid, and the remaining Rs 82.5 crore is due on June 2023. Slippage will stabilise at 2-2.5% pre-pandemic levels throughout the process. Analysts at Prabhudas Lilladher said in their September quarter results update that the recovery trend remains strong and within the same range.

Shares of City Union Bank are now down 4.3% after recovering from an opening low of Rs 180.65.