Time Extended for UCBs to make Additional Provisioning for NPAs - RBI - Reserve Bank of India
Time Extended for UCBs to make Additional Provisioning for NPAs
RBI / 2004-05/194 September 27, 2004 The Chief Executive Officers of All Primary (Urban) Co-operative banks Dear Sir/Madam, Annual Policy Statement for the Year 2004-05: Additional provisioning requirements for NPAs Please refer to our circular UBD.BPD.PCB. Cir 55/12.05.05/03-04 dated June 30, 2004, wherein UCBs were advised about the enhanced provisioning requirement on the secured portion of advances classified as doubtful for more than three years.
2. The Reserve Bank has received requests from banks and Federation/ Association of UCBs for giving UCBs some more time to restructure their accounts and progressively meet stricter prudential norms. Taking into account the submissions made in this regard, it has been decided to grant more time to the banks to meet the 100 % provisioning norm for advances identified as doubtful for more than three years, as under : A. Secured portion
B (i) Please note that for the portion of the advance, which is not covered by the realizable value of tangible security to which the bank has a valid recourse and the realizable value is estimated on a realistic basis, provision will be to the extent of 100 per cent as hitherto. (ii) Similarly, 100% provision has to be made for loss assets as hitherto. (iii) A few illustrations are furnished in annexure for clarity in this regard. 3. Banks are further advised in their own interest to make suitable additional provisions in the intervening years to ensure a smooth transition to the revised norms, which becomes effective from March 31, 2007. 4. Please acknowledge receipt of this circular to the concerned Regional Office. Yours faithfully, (K.R.Ananda) Chief General Manager-in-Charge Encl : As above Illustrations:
Provisioning requirement :
II. Advances classified as 'doubtful more than three years' on or after 1 April 2006
Provisioning requirement :
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