All Entities Regulated by the
Reserve Bank of India
Madam / Dear Sir,
Prudential Norms on Income
Recognition, Asset Classification and Provisioning pertaining to Advances
It has been represented to us
that consequent upon withdrawal of the legal tender status of the existing ?
500 and ? 1,000 notes (SBN) small borrowers may need some more time to
repay their loan dues. Taking these representations into consideration, it
has been decided to provide an additional 60 days beyond what is applicable
for the concerned regulated entity(RE) for recognition of a loan account as
substandard in the following cases:
working capital accounts (OD/CC)/crop loans, with any bank, the sanctioned
limit whereof is ? 1 crore or less;
loans, whether business or personal, secured or otherwise, the original
sanctioned amount whereof is ? 1 crore or less, on the books of any bank or
any NBFC, including NBFC (MFI). This shall include housing loans and
Note: The limits at (i) and (ii)
above are mutually exclusive limits applicable to respective category of
sanctioned by banks to NBFC (MFI), NBFCs, Housing Finance Companies, and
PACs and by State Cooperative Banks to DCCBs.
above guidelines will also be applicable to loans extended by DCCBs.
2. The above dispensation will
be subject to following conditions:
applies to dues payable between November 1, 2016 and December 31, 2016. REs
shall note to ensure that this is a short-term deferment of classification
as substandard due to delay in payment of dues arising during the period
specified above and does not result in restructuring of the loans.
payable before November 1 and after December 31, 2016, will be covered by
the extant instruction for the respective regulated entity with regard to
recognition of NPAs.
additional time given shall only apply to defer the classification of an
existing standard asset as substandard and not for delaying the migration
of an account across sub-categories of NPA.
3. All REs, including DCCBs, are
advised to be guided by the above instructions.
Chief General Manager-in-Charge