UCBs - Provisioning Requirement for Standard Assets - আরবিআই - Reserve Bank of India
UCBs - Provisioning Requirement for Standard Assets
RBI/2009-10/249 December 8 , 2009 Chief Executive Officer Dear Sir, Second Quarter Review of Monetary Policy for the Year 2009-10 - Please refer to paragraph 158 of the Second Quarter Review of Monetary Policy for the year 2009-10 announced on October 27, 2009 (copy of the paragraph enclosed). 2. In terms of paragraph 2(a) of our circular UBD.PCB.Cir.No 29 / 09.11.600 / 2008-09 dated December 1, 2008, the provisioning requirements for all types of standard assets in case of Tier II UCBs had been reduced to a uniform level of 0.40 per cent except in the case of direct advances to Agriculture and SME sectors which continued to attract a provisioning of 0.25 per cent. Tier I UCBs were also advised to make a general provision of 0.25% on all their standard assets. 3. In view of large increase in credit to the Commercial Real Estate (CRE) sector over the last one year and the extent of restructured advances in this sector, it would be prudent to build cushion against likely non-performing assets (NPAs). Accordingly, it has now been decided to increase the provisioning requirement for advances to the CRE sector classified as 'standard assets' to 1.00 per cent. 4. The standard asset provisioning requirements for all categories, after the above change, are summarised below
Yours faithfully, (A.K. Khound) Paragraph 158 of the Second Quarter Review In view of large increase in credit to the commercial real estate sector over the last one year and the extent of restructured advances in this sector, it would be prudent to build cushion against likely non-performing assets (NPAs). Accordingly, it is proposed to increase the provisioning requirement for advances to the commercial real estate sector classified as 'standard assets' from the present level of 0.40 per cent to 1 per cent. |