India’s state-owned banks have regularly been in the news for troubling bad debts or non-performing loans, but the country’s private lenders are usually perceived as efficiently run entities with much more healthier balance sheets.

However, private banks have also steadily accumulated bad loans over the past five years, with a 450% rise in bad loans — from 198 billion rupees (US$2.9 billion) at the end of the 2013-14 financial year to 1.09 trillion rupees at the end of March 2018, the Indian Express has reported.

According to the daily, the rise in private banks’ non-performing loans is mainly due to a recent circular issued by the Reserve Bank of India (RBI), which changed the rules governing the restructuring of stressed assets and the central bank’s tough stance against divergence of NPLs. Private banks are now finding it difficult to downplay or understate their bad loans.

India’s leading private lender ICICI Bank, whose chief executive officer Chanda Kochhar is facing allegations of conflict of interest and nepotism, topped the NPL table with 540.6 billion in NPLs and saw a jump of 514% in bad loans in the five years, up from 105 billion rupees at the end of the 2013-14 financial year.

But the steepest rise in the period was that of the third largest private bank Axis Bank, whose bad loans ballooned by 988%. NPLs jumped from 31.46 billion rupees in 2013-14 to 342.49 billion rupees at the end of 2017-18. Indeed, the central bank penalized Axis Bank for under-reporting 56.3 billion rupees worth of stressed assets last year.

In its circular, the RBI withdrew all existing restructuring mechanisms such as Corporate Debt Restructuring and Strategic Debt Restructuring and said that if a borrower company defaults even by a day, lenders must consider it a defaulter and start working on a resolution plan. Prior to that, bad loans were classified as such only after 90 days of default.

The central bank also said the company’s failure to come up with a resolution plan in 180 days would lead to the account being referred for insolvency proceedings.

Both the government and the bankers had opposed the new framework.