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RBI tightens disclosure norms on divergence in NPAs, provisions

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Norms that applied to commercial on disclosing divergence in asset classification and provisioning will hold good for urban cooperative (UCBs) also, the (RBI) on Tuesday said.


The regulator also revised specified thresholds for commercial to disclose divergence from this (FY23).


Banks will make disclosures if they satisfy either of the two conditions: First, when additional provisioning for (NPAs) assessed by the exceeds 10 per cent of the reported profit before provisions and contingencies; second, when additional gross NPAs identified by the regulator exceed 10 per cent of the reported incremental gross NPAs.


It gives a leeway to UCBs, for which the threshold for reported incremental gross NPAs will be 15 per cent. This threshold will be reduced progressively for UCBs in a phased manner after review, said.


The disclosure norm will become stricter from FY24. Banks will have to disclose divergence when the assessed by exceed 5 per cent of the reported profit before provisions and contingencies.


The disclosure conditions will also kick in if the additional identified by the regulator exceed 5 per cent of the reported incremental gross NPAs, it added.

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