coverage ratio

Relaxation in the norms relating to infrastructure lending and 70 per cent loan loss coverage ratio are likely to top the agenda when bankers meet Reserve Bank of India on January 14, ahead of the quarterly policy review. "Banks will press their demand to relax the norms on infrastructure lending. They may also ask for some easing in the guidelines announced for banks to augment their loan loss coverage ratio to 70 per cent," Indian Banks' Association chief executive, K .. Full Article

Allows inclusion of technical write-offs while calculating provision coverage ratio. In a relief to a large number of banks such as Canara Bank, the Reserve Bank of India (RBI) has allowed the lenders to include technical write-offs while increasing the provision coverage ratio (PCR) to 70 per cent. Full Article

At present, the provisioning requirements for NPAs range between 10 per cent and 100 per cent of the outstanding amount, depending on the age of the NPAs and the security available. Banks can also make additional specific provisions subject to a consistent policy based on riskiness of their credit portfolios, because the rates of provisioning stipulated for NPAs are the regulatory minimum. It has been observed that there is a wide heterogeneity and variance in the level .. Full Article

The Reserve Bank said it will soon come out with norms for banks to augment the capital requirements that the lenders have to keep aside against bad assets. “We will be issuing the circular (provisioning against NPAs) so you can then see details on that,” RBI deputy governor Usha Thorat told. Full Article

The Reserve Bank of India will soon issue guidelines on meeting provisioning rules and some banks have sought time to meet them, its deputy governor Shyamala Gopinath said on Friday. "Banks have made certain submissions to us in the policy, in terms of little more time. We are going to come up with guidelines soon," Gopinath said. Full Article