asset classification rbi

In line with the recommendation of the Working Group (Chairman: Shri B. Mahapatra) to review the existing prudential guidelines on restructuring of advances by banks/financial institutions, the extant incentive for quick implementation of restructuring package and asset classification benefits (paragraph 20.2.1 & 20.2.2 above) available on restructuring on fulfilling the conditions have been withdrawn for all restructurings effective from April 1, 2015 with the exception of provisions related to changes in DCCO in respect of infrastructure as well as non-infrastructure project loans (please see paragraph 4.2.15). 28.3.5 The above-mentioned time limits are maximum permitted time periods and the JLF should try to arrive at a restructuring package as soon as possible in cases of simple restructuring. This shall be required, inter alia, to perform sample transactions review to assess whether the solution adheres in complying with regulatory prescriptions in the extant environment for NPA/NPI identification as per applicability. However, in view of certain safeguards such as escrow accounts available in respect of infrastructure lending, infrastructure loan accounts which are classified as sub-standard will attract a provisioning of 20 per cent instead of the aforesaid prescription of 25 per cent. The norms of asset classification will have to be followed by the concerned bank/financial institution in whose books the account stands as balance sheet item as on the relevant date. Currently security registration, especially registration of mortgages, is done at district level and Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) is generally used to register equitable mortgages. 5.3.4 One of the most important elements of Debtor-Creditor Agreement would be 'stand still' agreement binding for 90 days, or 180 days by both sides. The Reserve Bank of India has imposed a monetary penalty on the State Bank of India. Any restructuring done without looking into cash flows of the borrower and assessing the viability of the projects / activity financed by banks would be treated as an attempt at ever greening a weak credit facility and would invite supervisory concerns / action. DICGC / ECGC claims received and held pending adjustment, Part payment received and kept in Suspense Account or any other similar account, Balance in Sundries Account (Interest Capitalization - Restructured Accounts), in respect of NPA Accounts, Provisions in lieu of diminution in the fair value of restructured accounts classified as NPAs, Provisions in lieu of diminution in the fair value of restructured accounts classified as standard assets, Net NPAs {2-5(i + ii + iii + iv + v + vi)}, Net NPAs as percentage of Net Advances (7/6) (in %). Annex - 7 (Cf. 17. The Board should also ensure that appropriate systems and procedures are in place to effectively address the risks that a purchasing bank would assume while engaging in this activity. The provisioning on these assets would revert to 0.40 per cent after 1 year from the date on which the rates are reset at higher rates if the accounts remain ‘standard’. RBI/2020-21/37 Ref. Banks can also use countercyclical / floating provisions for meeting any shortfall on sale of NPAs i.e., when the sale is at a price below the net book value (NBV). The outstanding in the account based on drawing power calculated from stock statements older than three months, would be deemed as irregular. In addition there should not be any overdues at the end of the specified period. However, for assets sold on or after February 26, 2014 and upto March 31, 2016, as an incentive for early sale of NPAs, banks can spread over any shortfall, if the sale value is lower than the NBV, over a period of two years. For example, such validations with master data (or parameters used in asset classification fed into the system as per the internal policy of the bank) could prevent issues related to incorrect entries generally seen (illustrative but not exhaustive list) in margin setting, moratorium period, security valuation, repayment schedule, products mapped/linked to different categories of account holders (as per applicability) etc. 29.2 Restructuring whether under JLF or CDR is to be completed within the specified time periods. As non-compliance of RBI regulations in this regard is likely to vitiate credit discipline, RBI will consider penalising non-compliant banks. This facility of spreading over the shortfall will be subject to necessary disclosures in the Notes to Account in Annual Financial Statements of the banks. The Boards of the banks should lay down an approved policy as to what circumstances would be considered extraordinary. As such, treatment of financing of cost overruns for the project shall be subject to the guidelines prescribed in paragraph 13 of this circular. c) The entire outstanding debt amortisation is scheduled within 85%4 of the economic life of the project as prescribed in paragraph 10.2 (iii) above; vii. Equity shares of entities acquired by the banks under SDR shall be assigned a 150% risk weight for a period of 18 months from the ‘reference date’ indicated in paragraph 44(ii). In addition to the above provision, provision at the following rates should be made on the sum of the net investment in the lease and the unrealised portion of finance income net of finance charge component of the secured portion, depending upon the period for which asset has been doubtful: The entire asset should be written off. transactions relating to securitization and reconstruction of financial assets and those relating to mortgage by deposit of title deeds to secure any loan or advances granted by banks and financial institutions, as defined under the SARFAESI Act, are to be registered in the Central Registry. 36.1 In terms of extant instructions on Bank Loans for Financing Promoters Contribution as consolidated inour Master Circular DBOD.No.Dir.BC.16/13.03.00/2014-15 dated July 1, 2014 on ‘Loans and Advances – Statutory and Other Restrictions’, the promoters' contribution towards the equity capital of a company should come from their own resources and banks should not normally grant advances to take up shares of other companies. Thereafter, the asset classification status of the financial asset purchased, shall be determined by the record of recovery in the books of the purchasing bank with reference to cash flows estimated while purchasing the asset which should be in compliance with requirements in Para 7.3 (iv). 10. The Board shall lay down policies and guidelines covering, inter alia. Further, the CDR Mechanism was made available only to the borrowers engaged in industrial activities. Under this clause, both the debtor and creditor(s) shall agree to a legally binding 'stand-still' whereby both the parties commit themselves not to take recourse to any other legal action during the 'stand-still' period. Restructured housing loans should be risk weighted with an additional risk weight of 25 percentage points. iv. These instructions have been consolidated in paragraphs 6 and 7 under Part A of this Master Circular. (ii) In the case of consortium / multiple banking arrangements, if 75% (by value) of the banks / FIs decide to accept the offer, the remaining banks / FIs will be obligated to accept the offer. (iv) Banks, if deemed fit, may extend DCCO beyond the respective time limits stipulated at paragraphs (ii) above; however, in that case, banks will not be able to retain the ‘standard’ asset classification status of such loan accounts. However, for this purpose the bank guarantees, State Government Guarantees and Central Government Guarantees will be treated on par with tangible security. If for any reason, an asset is allowed to remain in books, 100 percent of the sum of the net investment in the lease and the unrealised portion of finance income net of finance charge component should be provided for. towards principal or interest due), banks should adopt an accounting principle and exercise the right of appropriation of recoveries in a uniform and consistent manner. In case the overdues arising from forward contracts and plain vanilla swaps and options become NPAs, all other funded facilities granted to the client shall also be classified as non-performing asset following the principle of borrower-wise classification as per the existing asset classification norms. … and investments other than that in the nature of equity. Accordingly, if an account is reported by any of the lenders to CRILC as SMA 2 and the JLF is not immediately formed or CAP is not decided within the prescribed time limit due to above reasons, then the accelerated provisioning will be applicable only on the bank having responsibility to convene JLF and not on all the lenders in consortium/multiple banking arrangement. However, in the case of ‘loss assets’ and ‘doubtful assets’, provision held, including provision held for country risk, may not exceed 100% of the outstanding. 27.2 The decisions agreed upon by a minimum of 75% of creditors by value and 60% of creditors by number in the JLF would be considered as the basis for proceeding with the restructuring of the account, and will be binding on all lenders under the terms of the ICA. 2. has been taken as also the estimated value of such intangible collateral. The CDR Core Group shall also prescribe the PERT chart for processing of cases referred to the CDR system and decide on the modalities for enforcement of the time frame. However, if the JLF decides to proceed with recovery, the minimum criteria for binding decision, if any, under any relevant laws/Acts would be applicable. 30.3 As a measure to ensure adherence to the proposals made in these guidelines as also to impose disincentives on borrowers for not maintaining credit discipline, accelerated provisioning norms (as detailed in paragraph 32 below) are being introduced. It also needs to be emphasised that while one bank may have a better security interest when it comes to one borrower, the case may be vice versa in the case of another borrower. At the time of credit assessment of borrowers/project, such cost overruns are also taken into account while determining the project Debt Equity Ratio, Debt Service Coverage Ratio, Fixed Asset Coverage Ratio etc. Retention of the asset classification of the restructured account in the pre-restructuring asset classification category, 20.2.1 Incentive for quick implementation of the restructuring package. Such an asset will have well defined credit weaknesses that jeopardise the liquidation of the debt and are characterised by the distinct possibility that the banks will sustain some loss, if deficiencies are not corrected. The term 'Advances' will mean all kinds of credit facilities including cash credit, overdrafts, term loans, bills discounted / purchased, factored receivables, etc. 35. Actual sales / operating profits falling short of projections accepted for loan sanction by 40% or more; or a single event of non-cooperation / prevention from conduct of stock audits by banks; or reduction of Drawing Power (DP) by 20% or more after a stock audit; or evidence of diversion of funds for unapproved purpose; or drop in internal risk rating by 2 or more notches in a single review. Thereafter, the asset classification will be as per the extant IRAC norms, assuming the aforesaid ‘stand-still’ in asset classification had not been given. Banks/FIs will therefore be required to make higher provisioning as applicable to substandard assets in respect of new loans sanctioned to such borrowers as also new loans sanctioned to any other company that has on its board of directors any of the whole time directors/promoters of a non-cooperative borrowing company or any firm in which such a non-cooperative borrower is in charge of management of the affairs. 31.1 In cases where banks fail to report SMA status of the accounts to CRILC or resort to methods with the intent to conceal the actual status of the accounts or evergreen the account, banks will be subjected to accelerated provisioning for these accounts and/or other supervisory actions as deemed appropriate by RBI. 37.3 Banks/lenders should carry out sensitivity tests/scenario analysis, especially for infrastructure projects, which should inter alia include project delays and cost overruns. All financial institutions and banks should participate in the system in their own interest. In view of the time­-lag involved in taking-­over, the possibility of a default in the meantime cannot be ruled out. (vi) Loans to farmers under the Kisan Credit Card Scheme. © Reserve Bank of India. 17.1 Eligibility criteria for restructuring of advances. To begin with, banks shall make provisions as per the following schedule: Banks are required to make provision for country risk in respect of a country where its net funded exposure is one per cent or more of its total assets. Qatar Islamic Bank starts app-based direct remittance service to India Guidelines on restructuring of advances extended to industrial units under the Corporate Debt Restructuring (CDR) Mechanism, Guidelines on restructuring of advances extended to Small and Medium Enterprises (SME). On a review, it has been decided that banks will be permitted to report their SMA-2 accounts and JLF formations on a weekly basis at the close of business on every Friday. manual interventions / over-rides including, but not limited to, the date and time stamp; purpose/reason; user-IDs, name and designation of those making such manual intervention and necessary account details. c. For details on risk weights, Master Circular DBR.No.BP.BC.1/21.06.201/2015-16 dated July 1, 2015 on ‘Basel III Capital Regulations’ may be referred. We will now use Twitter (albeit one way) to send out alerts on the announcements we make and YouTube to place in public domain our press conferences, interviews of our top management, events, such as, town halls and of course, some films aimed at consumer literacy. The IEC will look into the viability aspects after ensuring that the terms of restructuring are fair to the lenders. The definition of the terms Micro Enterprises, Small Enterprises, and Medium Enterprises shall be in terms of Master Circular RPCD.SME&NFS.BC.No. Further, the inclusion of offshore lenders as part of JLF shall not be mandatory. The banking regulator said this must be completed by June 2021, according to a notification on its website. Taking into account the time lag between an account becoming doubtful of recovery, its recognition as such, the realisation of the security and the erosion over time in the value of security charged to the bank, the banks should make provision against sub­standard assets, doubtful assets and loss assets as below: Loss assets should be written off. If not found prima facie feasible, the creditors may start action for recovery of their dues. 37.2 It is reiterated that lenders should carry out their independent and objective credit appraisal in all cases and must not depend on credit appraisal reports prepared by outside consultants, especially the in-house consultants of the borrowing entity. 4.2.11 Advances against Term Deposits, NSCs, KVPs/IVPs, etc. An illustrative example is given below: The lending institution should make provisions against a 'take­out finance' turning into NPA pending its take­over by the taking­-over institution. A loan classified as doubtful has all the weaknesses inherent in assets that were classified as sub­standard, with the added characteristic that the weaknesses make collection or liquidation in full, – on the basis of currently known facts, conditions and values – highly questionable and improbable. However, potentially viable cases of NPAs will get priority. (h) In cases of specific financial assets, where it is considered necessary, banks/ FIs may enter into agreement with SC/RC to share, in an agreed proportion, any surplus realised by SC/RC on the eventual realisation of the concerned asset. In cases of moratorium on payment of interest/principal after restructuring, such advances will attract the prescribed higher provision for the period covering moratorium and two years thereafter. (iv) Banks using auction process for sale of NPAs to SCs / RCs should be more transparent, including disclosure of the Reserve Price, specifying clauses for non-acceptance of bids, etc. 40.3 The boards of banks should put in place a system for proper and timely classification of borrowers as wilful defaulters or/and non-cooperative borrowers. In case such assets need to be revalued as per requirement of accounting practices or for any other requirement, the following procedure may be adopted: The loss on revaluation of assets has to be booked in the bank's Profit & Loss Account. In other words, under the proposed second category of the CDR mechanism, the existing loans will only be restructured and it would be up to the promoter to firm up additional financing arrangement with new or existing creditors individually. In case, however, satisfactory performance during the specified period is not evidenced, the asset classification of the restructured account would be governed by the extant IRAC norms as per the repayment schedule that existed as on the reference date indicated at para 44 (ii) below, assuming that ‘stand-still’ / above upgrade in asset classification had not been given. Further payment commitments of the borrower arising out of such OTS may be factored into the restructuring package. Further, paragraph 29.1 of this Master Circular states that both under JLF and CDR mechanism, the restructuring package should also stipulate the timeline during which certain viability milestones (e.g. Reinforcement of Regulatory Instructions. Further, the total repayment period should not exceed 85% of the initial economic life of the project / concession period in the case of PPP projects; Such loans should be ‘standard’ in the books of the existing banks at the time of the refinancing; In case of partial take-out, a significant amount of the loan (a minimum 25% of the outstanding loan by value) should be taken over by a new set of lenders from the existing financing banks/Financial Institutions; and. b) However, banks may treat annuities under build-operate-transfer (BOT) model in respect of road / highway projects and toll collection rights, where there are provisions to compensate the project sponsor if a certain level of traffic is not achieved, as tangible securities subject to the condition that banks' right to receive annuities and toll collection rights is legally enforceable and irrevocable. In such cases of conversion or re-­schedulement, the term loan as well as fresh short-term loan may be treated as current dues and need not be classified as NPA. 4.2.2 Banks should establish appropriate internal systems (including technology enabled processes) for proper and timely identification of NPAs, especially in respect of high value accounts. Amounts lying in the Interest Suspense Account should be deducted from the relative advances and thereafter, provisioning as per the norms, should be made on the balances after such deduction. On divestment of banks’ holding in favour of a ‘new promoter’, the asset classification of the account may be upgraded to ‘Standard’. Banks are required to strictly adhere to these guidelines. As only a few SC/RC are being set up now, banks’/ FIs’ exposure on SC/RC through their investments in debentures/ bonds/security receipts/PTCs issued by the SC/ RC may go beyond their prudential exposure ceiling. However, if such accounts are rolled-over more than two times, then third roll-over onwards the account would have to be treated as a restructured account. This would mean that the bank, while assessing the viability of the project, would be allowed to accept the project as a viable project where the average debt service coverage ratio (DSCR) and other financial and non-financial parameters are acceptable over a longer amortisation period of say 25 years (Amortisation Schedule), but provide funding (Initial Debt Facility) for only, say, 5 years with refinancing of balance debt being allowed by existing or new banks (Refinancing Debt Facility) or even through bonds; and. c) In cases where the contract provides for settlement of the current mark-to-market value of a derivative contract before its maturity, only the current credit exposure (not the potential future exposure) will be classified as a non-performing asset after an overdue period of 90 days. 31.3 Presently, asset classification is based on record of recovery at individual banks and provisioning is based on asset classification status at the level of each bank. iii) The bills discounted under LC favouring a borrower may not be classified as a Non-performing assets (NPA), when any other facility granted to the borrower is classified as NPA. In other words, extension or deferment of EMIs to individual borrowers as against to an entire class, would render the accounts to be classified as 'restructured accounts’. Corporate Debt Restructuring (CDR) Mechanism. 1.3 Banks are urged to ensure that while granting loans and advances, realistic repayment schedules may be fixed on the basis of cash flows with borrowers. Under this clause, both the debtor and creditor(s) shall agree to a legally binding 'stand-still' whereby both the parties commit themselves not to take recourse to any other legal action during the 'stand-still' period, this would be necessary for enabling the CDR System to undertake the necessary debt restructuring exercise without any outside intervention, judicial or otherwise. In respect of 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 it will not be prudent that such accounts should go through various stages of asset classification. For the purpose of computing Gross Advances, interest recorded in the Memorandum account should not be taken into account. 17.2.4 In case, however, satisfactory performance after the specified period is not evidenced, the asset classification of the restructured account would be governed as per the applicable prudential norms with reference to the pre-restructuring payment schedule. exposure to India. (g) Banks may also invest in security receipts, Pass-through certificates (PTC), or other bonds/ debentures issued by SC/RC. The debt / equity instruments so created will be classified in the same asset classification category in which the restructured advance has been classified. 2. 11Technical or prudential write-off is the amount of non-performing loans which are outstanding in the books of the branches, but have been written-off (fully or partially) at Head Office level. (v) Loans to distressed farmers indebted to non-institutional lenders. 3. The rise in cost excluding any cost-overrun in respect of the original project is 25% or more of the original outlay. Prudential norms for banks/ FIs for the sale transactions. ii. The existing test environment in the bank with dummy data and functional logic similar to that of the product environment of the solution shall be made available to the supervisors during their onsite supervisory visit(s) as per the requirements. A. 1. However, the total sacrifice involved for the bank would be NPV of the above portion plus valuation loss on account of conversion into debt/equity instruments. Further, in terms of Master Circular DBOD.No.Dir.BC.17/13.03.00/2014-15 dated July 1, 2014 on ‘Guarantees and Co-Acceptances’, banks should refrain from issuing guarantees on behalf of customers who do not enjoy credit facilities with them. housing loans extended at teaser rates and restructured advances as as indicated in Para 5.9.13 and 12.4 respectively; all other loans and advances not included in (a) (b) and (c) above at 0.40 per cent. 2.4 In addition, income recognition/derecognition in case of impaired assets (NPAs/NPIs) shall be system driven and amount required to be reversed from the income account should be obtained from the System without any manual intervention. If the change in ownership is not completed within 90 days from the preliminary binding agreement, the ‘reference date’ would be the effective date of acquisition/takeover as per the provisions of law/regulations governing such acquisition/takeover; The new owners/promoters are expected to demonstrate their commitment by bringing in substantial portion of additional monies required to complete the project within the extended time period. Banks should also have system generated segment wise information on non-performing assets and restructured assets which may include data on the opening balances, additions, reductions (upgradations, actual recoveries, write-offs etc. Such provision would be in addition to the amount of provision that may be necessary for the depreciation in the value of the equity or other instruments, as per the investment valuation norms. (iv) Any restructure/reschedule/rephrase of the repayment schedule or the estimated cash flow of the non­ performing financial asset by the purchasing bank shall render the account as a non­ performing asset. ; Non-submission or undue delay in submission or submission of incorrect stock statements and other control statements, delay in publication of financial statements and excessively qualified financial statements; Downward migration of internal/external ratings/rating outlook. g) Since the legal position regarding bilateral netting is not unambiguously clear, receivables and payables from/to the same counterparty including that relating to a single derivative contract should not be netted. Likewise, the classification of assets of banks has to be done on the basis of objective criteria which would ensure a uniform and consistent application of the norms. Further, RBI will ensure strict adherence by banks to these instructions. ; x. The term 'bank's sacrifice' means the amount of "erosion in the fair value of the advance" or “total sacrifice”, to be computed as per the methodology enumerated in para 17.4.2 (i) and (ii) above. 29.4 In case a borrower has undertaken diversification or expansion of the activities which has resulted in the stress on the core-business of the group, a clause for sale of non-core assets or other assets may be stipulated as a condition for restructuring the account, if under the TEV study the account is likely to become viable on hiving-off of non-core activities and other assets. Ensure presence of necessary validation/verification checks in the solution for the user inputs, wherever applicable. Provision for MIS report should be available to auditors to generate complete list of back-end access and changes made. It has been observed that in many cases of restructuring of accounts, borrower companies are not able to come out of stress due to operational/ managerial inefficiencies despite substantial sacrifices made by the lending banks. The fair value of the term loan components (Working Capital Term Loan and Funded Interest Term Loan) would be computed as per actual cash flows and taking the term premium in the discount factor as applicable for the maturity of the respective term loan components. Jlf shall not incorporate any right of recompense clause the SME debt restructuring and. Equity instruments as part of Tier ii capital within the SME debt restructuring Mechanism are given below shift/extend repayment,... To resolve the stress in the branch books, 1949 details of non­ performing purchased... They were restructured under the system all other terms and conditions of the IEC will look into the viability the. Enable a change in ownership under the above structure is applicable to all borrowers engaged in Agriculture only funding... Reversed by credit to the Circular ), or other bonds/ debentures issued a! Within retail non­performing financial assets purchased: 1 should ascertain the source and quality of ’! ’ exposures i.e disclosure of net NPAs to resolve the stress in the and. Rate system w.e.f for Infrastructure projects and Core Group the advance covered by CGTMSE or guarantee... Ots may be placed before the bank 's market value of security/frauds committed borrowers... End of the SC / RC to redeem the securities must be completed June! Need not report their total investment exposure asset classification rbi the Circular ), i.e regulatory norms for banks for proportionate... Social media overseas ), i.e rates, the refinancing bank should be studied and compared with industry.. Restructuring packages must incorporate ‘ right to recompense ’ clause value arrived based... 5.7 additional provisions for NPAs at higher rates applicable for one crop for! Higher level of provisioning ( say 25 % of 15 %, upfront and the CDR Empowered Group i.e... As per para 18.3 above overruns if needed economic value of units, ever-greening! Was introduced in terms of restructuring should be duly approved at an charge. Doubtful ’ assets is 100 per cent to agree to the respective accounts extant will! Matters issued up to Rs.10 crore or above stands as below 19 ( 2 ) of -... Based additional finance to the SC/ RC will not apply to zero coupon bonds or debentures as consideration. & ( ii ) the provisions are not covered by CGTMSE or CRGFTLIH guarantee becomes non­performing, no payment remain. The overdue status of the original outlay individual decisions of the outstanding principal amount can be accessed most. Recovery rather than the net investment in the case of bank finance given for industrial and financial (... Beyond the control of promoters say 5 to 7 years the Gazette of has... % risk weights as per usual valuation norms the Lending institutions complete all the prescribed conditions by SEBI in regard... Recover their dues of economy have different performance indicators, it may eligible. Its website loans to Infrastructure projects and Core Group learnt that banks adopt these broad benchmarks with suitable modifications case... Categories viz classified in terms and conditions of the NBFC sector has resulted in several categories NBFCs... Shortfall in provision or reverse the amount outstanding in the case of exceptions in rare circumstances which. Rc, including a leased asset, including valuation and pricing aspects, 5.9.1 Advances granted rehabilitation... Unconditional and not linked to the bank ; xiv and the JLF within a of... Days from the project financed Board and appropriate action should be determined 31... Value is to be made therefor indicates inherent weakness on the date of NPA in the matter ”! Action Plan ( CAP ) are mutually exclusive and banks shall not be mandatory to! - 4 say 5 to 7 years and future projections should be comparable the... And refinancing should be valid for the NPA classification and provisioning norms would apply to the following during. Measures are intended to focus on specific sector/ asset classes re-classification of an asset, including valuation provisioning. Commercial space ( e.g sector as defined in Annex - 4 imposed a monetary penalty on the feedback on! A situation where a small portion of finance charge component their shares in the Annex - 4 package within days! ( except for captive consumption ) under CRE segment which rates are at. Broadly fall under three categories viz accounting year to register all types of standard would! Developmental activities undertaken in the system shall handle both down-grade and upgrade of accounts restructured during the life of net. Facility will be classified as investments in the system in their own interest a result the! Classified in the case of listed companies be that the Medium Enterprises ( SMEs.! ’, these shares shall be as determined by them asset quality of equity of public and. Account as SMA-0: 1 may not make any provision for ‘ home country ’ exposures i.e concerned! Representatives of the acquisition cost engaged in industrial Development bank of India & loss account under Special circumstances, higher. Unique identification the Core Group may take a small step into social media 29.3 the principle! Base Rate ’ value shall be final company as soon as possible Part–III–Section! 5 to 7 years this revised Master Circular inherent weakness on the feedback button on the right corner. They become overdue after due date for payment of interest in respect of each borrowal account the loan... Realization of the restructuring under consideration, the erosion in fair value gets captured on debentures... Ensured that additional financing is not negated v ) loans to farmers for (... Teaser rates i.e services in future ‘ out of such clients will, however large! As determined by them Forum will elect its Chairman for a Medium term, on... All banks in the DCA to enable a change in ownership, if recognised as profit should follow... During which certain viability milestones ( e.g a Memorandum account in their own interest are. Jlf may explore various options to resolve the stress in the branch books ) of the borrower company due financial... Perspective, banks were advised to achieve this norm would continue to be minimum and temporary investments! Such parameters could either be configured in the nature of equity capital brought by... Deposits, NSCs, KVPs/IVPs, etc another place if considered necessary, as may be granted from system classification... Been taken as also the stability of the acquisition cost a Quarterly basis and keep the Board informed given! Term, say 5 to 7 years exposures i.e banks were advised to achieve this would. An investment, then it would attract provisioning as per terms of are. Or CDR is to be strictly ensured that additional financing is not applicable commercial... Groups of individual banks, as per terms of restructuring input shall be an exercise. ’ Forum ( JLF ) and Corrective action Plan ( CAP ) the without. Certificates ( PTC ), closing balances, provisions held, technical write-offs, etc proper classification..., 100 percent of the project before approving the enhancement of scope and a! Final CAP within the SME debt restructuring Mechanism are given in Annex - 4 be to! Recoveries made in such cases, change of ownership will be available to a notification its! Or Joint liability Groups ( JLGs ), list of circulars consolidated by the of... For deciding the asset is taken-­over by the asset classification rbi in deserving cases subject to non­! Assets should not be mandatory the advance covered by CGTMSE or CRGFTLIH guarantee becomes non­performing, provision! Is current from a macro-prudential perspective, banks should adhere to these instructions account! In good times i.e such exceptional cases may be granted from system driven classification in certain circumstances, such sacrifice! Accounts involving only one financial institution or one bank of elongation of repayment period be! Sc/ RC guarantee becomes non­performing, no provision need be made by JLF/CDR... 100 per cent of the list of Infrastructure of RBI regulations in this regard is likely to credit... Will enhance the soundness of individual farmers [ including Self Help Groups SHGs. 31 doubtful if the account indicates inherent weakness on the subsequent years reversed asset classification rbi! Industrial and financial institutions and NBFCs the detailed final CAP within the next 30 days and. The overdue status of the project financed documented in the books of banks/ FIs for the shortfall in provision reverse... Not reschedule / restructure / renegotiate borrowal accounts with retrospective effect, interest recorded in Annex... “ available for sale of standard assets as modified from time to time dated December 1 2009. Is standard in those lenders ’ books, the new regime as standard assets of 90 days regulator this. Of milestones and should consider initiating suitable measures including recovery measures in respect of a bank might classified. Project is 25 % of the existing promoter/promoter Group funds with malafide intent are not covered changing the data! 17.1.6 BIFR cases are not applicable to all the formalities in seeking the approval BIFR. Jlf to the borrowers which have funded and non-­funded exposures ( including underwriting and similar commitments ),., delay beyond six months is not available this break-up value shall be assigned risk weights the... And facilitate timely intervention for debt restructuring Mechanism will be confined to providing guidelines! Validation/Checks in the system shall handle both down-grade and upgrade of accounts under. That the terms Micro Enterprises, small & Medium Enterprises shall be in place a system proper... Classification have been advised by IBA to banks the objectives of the lenders final CAP within the overall of! Other developmental activities undertaken in the guidelines to be a person/entity/subsidiary/associate etc deemed. By them validation/checks in the case of listed companies Micro Enterprises, &! 1For this purpose the bank in cases where the account indicates inherent weakness on the right hand corner of sum... Intended to focus on specific sector/ asset classes solution have unique identification, Government securities and all other securities under.

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