Banks’ Q4 provisioning likely to fall by Rs27,000 crore on RBI measures: Crisil
RBI’s move to ease provisioning requirements to cover losses on bond portfolio and cases referred for insolvency is likely to cut banks’ Q4 provisioning by Rs27,000 crore, says Crisil
Mumbai: Reserve Bank of India’s (RBI) decision to ease provisioning requirements to cover losses on bond portfolio and cases referred for insolvency proceedings is likely to reduce fiscal fourth quarter’s overall provisioning burden by Rs27,000 crore, said Crisil Ratings in a note Wednesday.
On 2 April, the central bank allowed banks to spread out the provisioning to cover losses on their government bond portfolio across four quarters.
Separately, it also gave banks time till June 2018 to reach 50% provisioning for accounts referred to National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, Crisil said.
Banks now have to make 40% provisioning for IBC accounts for March 2018 quarter.