RBI reviews prudential norms for Exposures to Corporates, Commercial Real Estate and NBFC- ND-SI
RBI has reviewed the provisioning norms which were earlier prescribed in view of the continued high credit growth observed in specific sectors. As a countercyclical measure, the provisioning requirements for all types of standard assets stand are reduced to a uniform level of 0.40 per cent except in the case of direct advances to agricultural and SME sectors, which shall continue to attract a provisioning of 0.25 per cent, as hitherto.
The revised norms would be effective prospectively but the provisions held at present should not be reversed. However, in future, if by applying the revised provisioning norms, any provisions are required over and above the level of provisions currently held for the standard category assets these should be duly provided for.
Further, the risk weights for the banks claims on corporates, commercial real estate and NBFC-ND-SI (other than AFCs) stand revised to a uniform risk weight of 100%. As regards the claims on AFCs, there is no change in the risk weights, which would continue to be governed by the credit rating of the AFC, except the claims that attract a risk weight of 150 per cent under the New Capital adequacy Framework, which shall be reduced to a level of 100 per cent.