RBI/2018-19/157
DBR.BP.BC.No.32/21.04.018/2018-19
April
1, 2019
All Commercial Banks
(Excluding Regional Rural Banks)
Madam / Dear Sir,
Disclosure in the "Notes to
Accounts" to the Financial Statements - Divergence in the asset
classification and provisioning
Please refer to our circular DBR.BP.BC.No.63/21.04.018/2016-17 dated April
18, 2017, on the captioned subject, requiring disclosures by banks
where divergences from prudential norms on income recognition, asset
classification and provisioning exceed certain thresholds.
2. It is observed that some
banks, on account of low or negative net profit after tax, are required to
disclose divergences even where the additional provisioning assessed by RBI
is small, which is contrary to the regulatory intent that only material
divergences should be disclosed. Therefore, it has been decided that
henceforth, banks should disclose divergences, if either or both of the
following conditions are satisfied:
a.
the
additional provisioning for NPAs assessed by RBI exceeds 10 per cent of the
reported profit before provisions and contingencies for the reference
period, and
b.
the
additional Gross NPAs identified by RBI exceed 15 per cent of the published
incremental Gross NPAs for the reference period.
3. All other instructions of our
aforementioned circular dated April 18, 2017 would
remain unchanged.
Yours faithfully,
(Saurav Sinha)
Chief General Manager-in-Charge
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