RbiSearchHeader

Press escape key to go back

Past Searches

Theme
Theme
Text Size
Text Size
S3

Notification Marquee

RBI Announcements
RBI Announcements

RbiAnnouncementWeb

RBI Announcements
RBI Announcements

Asset Publisher

55647466

Provisioning pertaining to Fraud Accounts

RBI/2014-15/535
DBR.No.BP.BC.83/21.04.048/2014-15

April 1, 2015

All Scheduled Commercial Banks
(Excluding Regional Rural Banks)

Dear Sir,

Provisioning pertaining to Fraud Accounts

Please refer to the guidelines compiled in paragraph 4.2.9 of Master Circular on Prudential Norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dated July 1, 2014, in terms of which, in accounts where there are potential threats for recovery on account of erosion in the value of security or non­-availability of security and existence of other factors such as frauds committed by borrowers, the asset classification, and consequent provisioning, depends upon the realisable value of security.

2. On a review, it has been decided to prescribe a uniform provisioning norm in respect of all cases of fraud, as under:

  1. The entire amount due to the bank (irrespective of the quantum of security held against such assets), or for which the bank is liable (including in case of deposit accounts), is to be provided for over a period not exceeding four quarters commencing with the quarter in which the fraud has been detected;

  2. However, where there has been delay, beyond the prescribed period, in reporting the fraud to the Reserve Bank, the entire provisioning is required to be made at once. In addition, Reserve Bank of India may also initiate appropriate supervisory action where there has been a delay by the bank in reporting a fraud, or provisioning thereagainst.

3. We reiterate that banks must scrupulously adhere to the guidelines contained in circular DBS.CO.CFMC.BC.No.1/23.04.001/2014-15 dated July 1, 2014 on ‘Frauds – Classification and Reporting’.

Yours faithfully,

(Sudarshan Sen)
Chief General Manager-in-Charge

RbiTtsCommonUtility

PLAYING
LISTEN

Related Assets

RBI-Install-RBI-Content-Global

RbiSocialMediaUtility

Install the RBI mobile application and get quick access to the latest news!

Scan Your QR code to Install our app

RbiWasItHelpfulUtility

Was this page helpful?