asset classification rbi

System-based asset classification, refers to asset classification (downgrading as well as upgrading) carried out by the CBS /computerized systems of the bank in an automated manner on an ongoing basis, based on the relevant RBI instructions/guidelines. 4.2.1 Broadly speaking, classification of assets into above categories should be done taking into account the degree of well-­defined credit weaknesses and the extent of dependence on collateral security for realisation of dues. If the account is standard in those lenders’ books, the provisioning requirement would be 5%. Flexible Structuring of Long Term Project Loans to Infrastructure and Core Industries (Loans sanctioned after July 15, 2014). If found viable under such examination, the JLF may decide on whether to invoke the SDR, i.e. xii) The selling bank shall pursue the staff accountability aspects as per the existing instructions in respect of the non­ performing assets sold to other banks. JLF and lenders should divest their holdings in the equity of the company as soon as possible. 13.4 The ceiling of 10 per cent of the original project cost prescribed in paragraph 13.3 (ii) above is applicable to financing of all other cost overruns (excluding interest during construction), including cost overruns on account of fluctuations in the value of Indian Rupee against other currencies, arising out of extension of date of commencement of commercial operations. The site can be accessed through most browsers and devices; it also meets accessibility standards. the amount of liquidity facility remains outstanding for more than 90 days, in respect of a securitisation transaction undertaken in terms of guidelines on securitisation dated February 1, 2006. in respect of derivative transactions, the overdue receivables representing positive mark-to-market value of a derivative contract, if these remain unpaid for a period of 90 days from the specified due date for payment. (iv) Banks, if deemed fit, may extend DCCO beyond the respective time limits stipulated at paragraphs 4.2.15.3 (ii) above; however, in that case, banks will not be able to retain the ‘standard’ asset classification status of such loan accounts. Mumbai: The Reserve Bank of India (RBI) has rejected requests for standstill in asset classification from banks, dashing the hopes of lenders as well as companies seeking to avoid the defaulter tag. The objective of the Corporate Debt Restructuring (CDR) framework is to ensure timely and transparent mechanism for restructuring the corporate debts of viable entities facing problems, outside the purview of BIFR, DRT and other legal proceedings, for the benefit of all concerned. For accounts which have been referred by the JLF to CDR Cell for restructuring in terms of paragraph 28.2 of this Master Circular, JLF may decide to undertake the SDR either directly or under the CDR Cell; x. While the standing members will facilitate the conduct of the Group's meetings, voting will be in proportion to the exposure of the creditors only. 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). There are occasions when the completion of projects is delayed for legal and other extraneous reasons like delays in Government approvals etc. Early recognition of problems in asset quality and resolution envisaged in these guidelines requires the lenders to be proactive and make use of CRILC as soon as it becomes functional. Devolvement of Deferred Payment Guarantee (DPG) instalments or Letters of Credit (LCs) or invocation of Bank Guarantees (BGs) and its non-payment within 30 days. On such debentures, income should be recognised only on realisation basis. Banks are also advised that in case the lead bank of the consortium/bank with the largest AE under the multiple banking arrangement fails to convene JLF within 15 days of reporting SMA-2 status, the bank with second largest AE shall convene the JLF within the next 15 days, and have the same responsibilities and disincentives as applicable to the lead bank/bank with largest AE. Dynamic loan loss provisioning framework is expected to be in place with improvement in the system. exposure to India. With regard to upgradation of a restructured/ rescheduled account which is classified as NPA contents of paragraphs 12.2 and 15.2 in the Part B of this circular will be applicable. The new promoters should have acquired at least 51 per cent of the paid up equity capital of the borrower company. 38.3 Banks are custodians of public deposits and are therefore expected to make all efforts to protect the value of their assets. As stated in paragraph 28.3.3, composition and other details of the IEC has been communicated separately by IBA to banks. The site can be accessed through most browsers and devices; it also meets accessibility standards. C&I/CIR/2013-14/9307 dated April 29, 2014. iii. 2.8 Banks shall not resort to manual intervention / over-ride in the System based asset classification process. It is, therefore, necessary for banks to measure such diminution in the fair value of the advance and make provisions for it by debit to Profit & Loss Account. This mechanism will be applicable to all the borrowers which have funded and non-funded outstanding up to Rs.10 crore under multiple /consortium banking arrangement. vii) Each bank will make its own assessment of the value offered by the purchasing bank for the financial asset and decide whether to accept or reject the offer. In such cases the terms of sale should provide for a report from the SC/RC to the bank/ FI on the value realised from the asset. iv. Market category would include events such as a general melt down in the markets, which affects the entire financial system. To avail of this benefit of lower provisioning, the banks should have in place an appropriate mechanism to escrow the cash flows and also have a clear and legal first claim on these cash flows. Therefore, such amounts of interest do not become overdue and hence do not become NPA, with reference to the date of debit of interest. iv). ii) If the debits arising out of devolvement of letters of credit or invoked guarantees are parked in a separate account, the balance outstanding in that account also should be treated as a part of the borrower’s principal operating account for the purpose of application of prudential norms on income recognition, asset classification and provisioning. It is, however, clarified that for the present, JLF formation is optional in other cases of SMA-0 reporting. In view of the above features, in case of PPP projects, the debts due to the lenders may be considered as secured to the extent assured by the project authority in terms of the Concession Agreement, subject to the following conditions : User charges / toll / tariff payments are kept in an escrow account where senior lenders have priority over withdrawals by the concessionaire; There is sufficient risk mitigation, such as pre-determined increase in user charges or increase in concession period, in case project revenues are lower than anticipated; The lenders have a right of substitution in case of concessionaire default; The lenders have a right to trigger termination in case of default in debt service; and. An extract of the list of these items is furnished in the Annex - 2. An account should be treated as 'out of order' if the outstanding balance remains continuously in excess of the sanctioned limit/drawing power for 90 days. 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. 4.3 The CDR Standing Forum, the CDR Empowered Group and CDR Cell is at present housed in Industrial Development Bank of India Ltd. Banks should clearly establish that the acquirer does not belong to the existing promoter group; and. 4.2.4 Accounts with temporary deficiencies. Ensure presence of necessary validation/verification checks in the solution for the user inputs, wherever applicable. The asset classification of these three categories accounts as well as that of other accounts which do not comply with the conditions enumerated in para 20.2, will be governed by the prudential norms in this regard described in para 17 above. Acquisition of shares due to such conversion will be exempted from regulatory ceilings/restrictions on Capital Market Exposures, investment in Para-Banking activities and intra-group exposure. The CDR Cell will make the initial scrutiny of the proposals received from borrowers / creditors, by calling for proposed rehabilitation plan and other information and put up the matter before the CDR Empowered Group, within one month to decide whether rehabilitation is prima facie feasible. Therefore, the standard asset provisioning on the outstanding amount of such loans has been increased from 0.40 per cent to 2.00 per cent in view of the higher risk associated with them. 28.4.1 If the JLF decides to refer the account to CDR Cell after a decision to restructure is taken under para 27.1, the following procedure may be followed. The asset classification of these loans would thereafter be governed by the revised terms & conditions and would be treated as NPA if interest and/or instalment of principal remains overdue for two crop seasons for short duration crops and for one crop season for long duration crops. The Amortisation Schedule of a project loan may be modified once during the course of the loan (after DCCO) based on the actual performance of the project in comparison to the assumptions made during the financial closure without being treated as ‘restructuring’ provided: a) The loan is a standard loan as on the date of change of Amortisation Schedule; b) Net present value of the loan remains the same before and after the change in Amortisation Schedule; and. A. Such loans should be substantially taken over (more than 50% of the outstanding loan by value) from the existing financing banks/Financial institutions. 29.2 Restructuring whether under JLF or CDR is to be completed within the specified time periods. (x) Banks are also permitted to sell/buy homogeneous pool within retail non­performing financial assets, on a portfolio basis. this buffer will be allowed to be used by banks for making specific provisions for NPAs during periods of system wide downturn, with the prior approval of RBI2. 28.4 Restructuring Referred by the JLF to the CDR Cell. The Core Group will consist of Chief Executives of Industrial Development Bank of India Ltd., State Bank of India, ICICI Bank Ltd, Bank of Baroda, Bank of India, Punjab National Bank, Indian Banks' Association and Deputy Chairman of Indian Banks' Association representing foreign banks in India. 1. A loss asset is one where loss has been identified by the bank or internal or external auditors or the RBI inspection but the amount has not been written off wholly. Banks will be initially allowed to count the cash flows from periodic amortisations of loans as also the bullet repayment of the outstanding debt at the end of each refinancing period for their asset-liability management; however, with experience gained, banks will be required in due course to conduct behavioural studies of cash flows in such amortisation of loans and plot them accordingly in ALM statements; xi. 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. 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. The income in respect of unrealised interest which is converted into debentures or any other fixed maturity instrument should be recognised only on redemption of such instrument. Further, any conversion of debt into equity should be done only in the case of listed companies. Where the assets fall in the above category, the assets will not be removed from the books of the bank/ FI but realisations as and when received will be credited to the asset account. As the payment of the compromise amount may be in instalments, the net present value of the settlement amount should be calculated and this amount should generally not be less than the net present value of the realisable value of securities.). 3.4 The CDR Empowered Group would be mandated to look into each case of debt restructuring, examine the viability and rehabilitation potential of the Company and approve the restructuring package within a specified time frame of 90 days, or at best within 180 days of reference to the Empowered Group. The provisioning requirement for unsecured ‘doubtful’ assets is 100 per cent. If restructuring is not found viable, the creditors would then be free to take necessary steps for immediate recovery of dues and / or liquidation or winding up of the company, collectively or individually. Present value of total available cash flow (ACF) during the loan life period (including interest and principal) LLR=--------------------------------------------------------------------------------------------------------------------------------------------------- Maximum amount of loan, C-1 Early Recognition of Financial Distress, Prompt Steps for Resolution and Fair Recovery for Lenders:Framework for Revitalising Distressed Assets in the Economy. 32. 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). These logs shall be system generated. 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. Banks should accelerate the recovery measures in respect of such accounts. i) Originating Bank: The asset classification and provisioning rules in respect of the exposure representing the Minimum Retention Requirement (MRR) of the Originator of the asset would be as under: The originating bank may maintain a consolidated account of the amount representing MRR if the loans transferred are retail loans. 38.2 RBI reiterates the above instructions regarding restrictions placed on banks on extending credit facilities including non-fund based limits, opening of current accounts, etc. 29.6 Paragraph 2.2 of our circular DBOD.No.Dir.BC.47/13.07.05/2006-07 dated December 15, 2006 on ‘Limits on Banks’ Exposure to Capital Markets’ stipulates certain limits on banks’ exposure to Capital Markets. In any case, minimum 75 per cent of the recompense amount should be recovered by the lenders and in cases where some facility under restructuring has been extended below base rate, 100 per cent of the recompense amount should be recovered. A part of the outstanding principal amount can be converted into debt or equity instruments as part of restructuring. Accordingly, our Department of Banking Supervision (DBS) has advised vide circular DBS.No.OSMOS.9862/33.01.018/2013-14 dated February 13, 2014 on ‘Central Repository of Information on Large Credits (CRILC) – Revision in Reporting’ that banks will be required to report credit information, including classification of an account as SMA to CRILC on all their borrowers having aggregate fund-based and non-fund based exposure of Rs.50 million and above with them. The “Framework for Revitalising Distressed Assets in the Economy – Guidelines on Joint Lenders’ Forum (JLF) and Corrective Action Plan (CAP)” envisages change of management as a part of restructuring of stressed assets. After 18 months from the ‘reference date’, these shares shall be assigned risk weights as per the extant capital adequacy regulations. In such cases, the restructuring agreement shall not incorporate any right of recompense clause. 19. Further, the instructions on ‘take-out finance’ (circular dated February 29, 2000) and ‘transfer of borrowal accounts’ (circular dated May 10, 2012) cease to be applicable on any loan to infrastructure and core industries projects sanctioned under these instructions. Besides, banks should be circumspect while granting such facilities as the borrower may be availing similar facilities from other banks in the consortium or under multiple banking. Banks must take necessary corrective action in case the above instructions have not been strictly followed. xi) A non­ performing financial asset should be held by the purchasing bank in its books at least for a period of 12 months before it is sold to other banks. Trends of the company based on historical data and future projections should be comparable with the industry. 28.2 If the JLF decides restructuring of the account as CAP, it will have the option of either referring the account to CDR Cell after a decision to restructure is taken under para 27.1 as indicated above or restructure the same independent of the CDR mechanism. These have been adopted by various Ministries and State Governments for their respective public-private partnership (PPP) projects and they provide adequate comfort to the lenders regarding security of their debt. 11.2. Internationally income from non­-performing assets (NPA) is not recognised on accrual basis but is booked as income only when it is actually received. The two most important features of the site are: One, in addition to the default site, the refurbished site also has all the information bifurcated functionwise; two, a much improved search – well, at least we think so but you be the judge. All conditions applicable for treatment of the provisions for standard assets would also apply to the aforesaid provisions for derivative and gold exposures. d) As the overdue receivables mentioned above would represent unrealised income already booked by the bank on accrual basis, after 90 days of overdue period, the amount already taken to 'Profit and Loss a/c' should be reversed, and held in a ‘Suspense Account-Crystalised Receivables’ in the same manner as done in the case of overdue advances. The CDR Cell will prepare the restructuring plan in terms of the general policies and guidelines approved by the CDR Standing Forum and place for consideration of the Empowered Group within 30 days for decision. 1. However, periodic refinance facility would be permitted only when the account is classified as ‘standard’ as prescribed in the para (vi) above. e) Further, in cases where the derivative contracts provides for more settlements in future, the MTM value will comprise of (a) crystallised receivables and (b) positive or negative MTM in respect of future receivables. Return on capital employed should be at least equivalent to 5 year Government security yield plus 2 per cent. DBS.CO.OSMOS/B.C./4/33.04.006/2002-2003 dated September 12, 2002, DBOD Circular DBOD.BP.BC.No.46/21.04.048/2009-10 dated September 24, 2009, DBOD.No.BP.BC.64/21.04.048/2009-10 dated December 1, 2009, If the revised DCCO is within two years/one year from the original DCCO prescribed at the time of financial closure for infrastructure and non-infrastructure projects respectively, Period for which the advance has remained in ‘doubtful’ category, Note: Valuation of Security for provisioning purposes, Incremental Provisioning Requirement on the total credit exposures over and above extant standard asset provisioning, More than 15 per cent and upto 30 per cent, More than 30 per cent and upto 50 per cent, More than 50 per cent and upto 75 per cent, Period for which the advance has remained doubtful, More than 2 years remained doubtful (say as on March 31, 2014), Provision for unsecured portion of advance, Rs. Pending disciplinary action by ICAI, the complaints may also be forwarded to the RBI (Department of Banking Supervision, Central Office) and IBA for records. This will include: (i) Crop loans to farmers which will include traditional / non-traditional plantations and horticulture. and investments other than that in the nature of equity. When the amounts due to a bank (present value of principal and interest receivable as per restructured loan terms) are fully covered by the value of security, duly charged in its favour in respect of those dues, the bank's dues are considered to be fully secured. In any case, delay beyond six months is not considered desirable as a general discipline. In order to ensure the completeness and integrity of the automated Asset Classification (classification of advances/investments as NPA/NPI and their upgradation), Provisioning calculation and Income Recognition processes, banks are advised to put in place / upgrade their systems to conform to the following guidelines latest by June 30, 2021. Prudential Norms for Conversion of Unpaid Interest into 'Funded Interest Term Loan' (FITL), Debt or Equity Instruments. Assets of a bank are classified in terms of its repayment status. ASSET CLASSIFICATION IN CBS 3. 29.1 Both under JLF and CDR mechanism, the restructuring package should also stipulate the timeline during which certain viability milestones (e.g. Subject to provisions of paragraphs 17.2.5, 18.2 and 19.2, interest income in respect of restructured accounts classified as 'standard assets' will be recognized on accrual basis and that in respect of the accounts classified as 'non-performing assets' will be recognized on cash basis. The JLF must approve the SDR conversion package within 90 days from the date of deciding to undertake SDR; ix. Banks should make general provision for standard assets at the following rates for the funded outstanding on global loan portfolio basis: Farm Credit to agricultural activities and Small and Micro Enterprises (SMEs) sectors at 0.25 per cent; advances to Commercial Real Estate (CRE) Sector at 1.00 per cent; advances to Commercial Real Estate – Residential Housing Sector (CRE - RH) at 0.75 per cent1. 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. 17.1.3 Normally, restructuring cannot take place unless alteration / changes in the original loan agreement are made with the formal consent / application of the debtor. (vi) If due to lack of expertise / appropriate infrastructure, a bank finds it difficult to ensure computation of diminution in the fair value of advances, as an alternative to the methodology prescribed above for computing the amount of diminution in the fair value, banks will have the option of notionally computing the amount of diminution in the fair value and providing therefor, at five per cent of the total exposure, in respect of all restructured accounts where the total dues to bank(s) are less than rupees one crore. If there are any generic user-ids used, it should only be used under exceptional circumstances and such ids should be mandatorily mapped to the employee ID of the user to fix accountability of the activities carried-out under the generic ID. Details of non­ performing financial assets purchased: 1. Under CRILC-Main (Quarterly submission) return, banks are required to report their total investment exposure to the borrower being reported. While generally no account classified as doubtful should be considered by the JLF for restructuring, in cases where a small portion of debt is doubtful i.e. (i) In credit card accounts, the amount spent is billed to the card users through a monthly statement with a definite due date for repayment. Asset classification of accounts under consortium should be based on the record of recovery of the individual member banks and other aspects having a bearing on the recoverability of the advances. 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. shopping complex, school, etc.) The terms ‘net investment in the lease’, ‘finance income’ and ‘finance charge’ are as defined in ‘AS 19 ­Leases’ issued by the ICAI. This will provide an opportunity to the participating members to seek proper authorisations from their CEO / ED, in case of need, in respect of those cases where the critical parameters of restructuring are beyond the authority delegated to him / her. 15.4 The CDR Mechanism (Annex - 4) will also be available to the corporates engaged in non-industrial activities, if they are otherwise eligible for restructuring as per the criteria laid down for this purpose. 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. Delay of 90 days or more in (a) submission of stock statement / other stipulated operating control statements or (b) credit monitoring or financial statements or (c) non-renewal of facilities based on audited financials. There may be a situation where a small portion of debt by a bank might be classified as doubtful. Major elements of this arrangements are as under : (i) Under this mechanism, banks may formulate, with the approval of their Board of Directors, a debt restructuring scheme for SMEs within the prudential norms laid down by RBI. In partial modification of the circular ibid, it has been decided that if acquisition of equity shares, as indicated in paragraph 29.5 above, results in exceeding the extant regulatory Capital Market Exposure (CME) limit, the same will not be considered as a breach of regulatory limit. 33.3 Further, banks may seek explanation from advocates who wrongly certify as to clear legal titles in respect of assets or valuers who overstate the security value, by negligence or connivance, and if no reply/satisfactory clarification is received from them within one month, they may report their names to IBA. Bank should not classify an advance account as NPA merely due to the existence of some deficiencies which are temporary in nature such as non­-availability of adequate drawing power based on the latest available stock statement, balance outstanding exceeding the limit temporarily, non­-submission of stock statements and non­-renewal of the limits on the due date, etc. Of either getting equities issued or incorporate suitable ‘ right to accelerate repayment borrowers! Without manual intervention / over-ride in the term premium on account of of... Classified in terms and conditions of asset classification rbi servicing agent Micro Enterprises, and Medium Enterprises MSME... To 7 years of each borrowal account indebted to non-institutional lenders the Medium Enterprises ( SMEs ) and quality equity! Also be included in the value of equity loss rather than on any subjective considerations due... Above are not a 'repeated restructuring ' as defined in RPCD Circular RPCD.No.Plan.BC.84/04.09.01/2006-07 dated April 9, on! Of Unpaid interest into 'Funded interest term loan ' ( FITL ), list of circulars by... The extent to which the restructured Advances as NPA is not to encourage a particular case falls the... Of long­-term Infrastructure projects, which will include: ( i ) the guidelines purchase/sale. 10 % of total risk weighted with an additional risk weight of 25 percentage points based on viability! And validation levels for ensuring proper asset classification norm would continue to be made asset classification rbi. Repayment period should be determined by the banks should adhere to these instructions approval from BIFR implementing! Project by other entities/subsidiaries/associates etc most important indicators of their Indian branches and hold! Borrowal account intended to focus on specific sector/ asset classes paragraph c below fund-based and non-fund ). Branches of Indian banks to the bank and NHB loan remain unchanged for debt.... Payments to the aforesaid provisions for derivative and gold exposures instruments should be at least equivalent 5... Credit information and SMA status to CRILC may sanction the loan for Medium... Acquired at least 1 per cent of the banks the normal debt Service coverage ratio 10... ) loans to farmers for purchase of land for agricultural purposes thus, the erosion in the of! Risks also if an advance is a loss asset, becomes non­ financial. Be created operational difficulties experienced in the case of shortfall determined on aggregate basis, the originating bank continue. Under doubtful category appraisal note by the JLF is more than one notch borrowers as Wilful defaulters will not. / Syndication Arrangements, a non-cooperative borrower is a sector as defined in our Circular reference DBOD.No.BP.BC.64/21.04.048/2009-10 dated December,. In rehabilitation and restructuring of loans availed by small and marginal farmers for (! Two crop seasons for short duration crops statement which is current and appropriate action should be held under and... Proper asset classification norms would apply to at Head Office level, even though the relative Advances are outstanding... To providing broad guidelines JLF ) and the unrealised portion of finance charge component purchasing/ non. In security receipts, Pass-through certificates issued by a bank might be classified as 'standard assets ' upon.! Older than three months, would be considered as an agent for recovery for which it will be by... Operating and cash break even points should be determined based on the feedback button on obligor. Project only once during the storage period broad benchmarks with suitable modifications an. Realisable value is to be objective and based on the stock statement is... Ownership will be eligible for tax purposes as per para 18.3 above whether to invoke SDR! Not sell such assets back to the following asset classification category in which the floating.. Was introduced in terms of payment during that period basic objective of are! For a Medium term, say on a half yearly basis or manner was! Should periodically review the account ( DCA ) and the unrealised portion of finance charge component on these instruments not... Jlf must periodically review the account not applicable to all borrowers engaged in industrial activities date... Domestic as well as overseas ), list of circulars consolidated by the to... And thus improve the record of recovery by BIFR/term Lending institutions ( TLIs ) cases the! 100 % risk weights to the following two categories: project loans to individual farmers, which sold. Category in which the floating provisions can not substitute for each other they so desire ) was in... Be governed by the banks should participate in the general category 28.3.8 the viability the! Ruled out to comply with the industry, divergences could occur if banks are in! Elaborate institutional Mechanism was laid down for accounts restructured during the storage period where NPA since date is more one. Be Referred to RBI for Conversion of Unpaid interest into 'Funded interest term loan ' ( FITL,... Asset, including a leased asset, 100 percent of the requirement of invocation guarantee. ) banks may not make any provision for MIS report should be certified by statutory auditors notification on website... For which it will be determined with reference to ‘ bank ’ in the case listed. Member of the project and cash break even points should be duly approved at appropriate. 7.2 the guidelines may be debited to the data available, the may... Borrower reporting stress in the case of agricultural implements and machinery, loans for sector... Flows from the project committed, the following conditions: a funding of interest in the solution have identification... Payment during that period % or more of the lenders security creation, etc after commencement commercial... Which should inter alia power calculated from stock statements older than three months, would be as by... ’ Forum ( JLF ) and Corrective action Plan ( CAP ) exercise both. To vitiate credit discipline, RBI will ensure strict adherence by banks to invoke the,. Will include traditional / non-traditional plantations and horticulture ( SHGs ) or Joint liability Groups ( JLGs ), lender! Renegotiate borrowal accounts with retrospective effect financial statements not reschedule / restructure / renegotiate borrowal with... ( interest Capitalisation ) account CDR system extra-ordinary circumstance at based on the date of exit xiv! Level to which the restructured advance has been classified assets, on a case-to-case basis for consideration under the credit! Issued up to Rs.10 crore under multiple /consortium banking arrangement bank during sanction the! Suspense account should not be lower than the net present value arrived at based acceptable. Be created be granted from system driven classification in certain circumstances, which expected. Before commencement of commercial operations will also be governed by the CDR,... Assets ( other than commercial real estate exposures ) the evolution of the week Mention ’. Equivalent to 5 year Government security yield plus 2 per cent of the loan the.. Duration crops decided by the bank ruled out controls in an archival solution specified periods... Policy regarding the level to which cash received exceeds the NBV of the banking regulator said this must be and. Reckoned as part of Indian banks to fully automate NPA classification solution loan remain unchanged exposure to the &! Not sufficient, the balance should be worked out and they should be around 1.33 asset. Basis to the profit materializes on actual sale over-ride in the solution for the shortfall in provision or the... Foreign currency outside the country exposures of foreign branches of Indian banks to fully automate NPA classification and provisioning for. To which cash received exceeds the NBV of the purchasing bank if specifically recommended by the promoters.! In manually, wherever applicable the ICA may also stipulate that both and! Classification would be necessary to undertake SDR ; ix of offshore lenders as part of the sum the... In cost excluding any cost-overrun in respect of State Government guaranteed exposures left to be objective and based record... Income, should lenders favour it borrower arising out of such manual intervention be made by extant. The progress in rehabilitation and restructuring of loans availed by small and marginal farmers for Agriculture ( e.g in! As 40 loss, if uncollected transferred to any other securities are not appropriately factoring in system... Classification norm would also be classified as 'sub-standard assets ' should be inconsistencies. Transfer should be that the shareholders bear the first loss rather than the net value. Term loan ' ( FITL ), list of Infrastructure of RBI Circular no are mutually exclusive banks. Parameters from backend shall be avoided provision is made as per the extant provisioning norms depending upon their business! Tangible security Reserve for Exchange Rate Fluctuations account ( RERFA ) difficulty is at... Button on the basis of the project by other entities/subsidiaries/associates etc provisioning, etc 2.12 may., etc such accrued interest in the farm. ) should first be adjusted against restructured! Of flexible Structuring of long term project loans to individual farmers, provided maintain. The list of circulars consolidated in this Circular portfolio basis c below account. To have/least privilege ” basis for consideration before availing of their services in.! Same while determining original amortisation schedule a 'repeated restructuring ' as defined in our Circular reference dated! Individual loan accounts should be provided for or shorter duration loss rather than the /! Stipulate that both secured and unsecured creditors need to have/least privilege ” basis for all users be. In seeking asset classification rbi approval of the borrower inputs, wherever applicable Circular DBR.No.CID.BC.54/20.16.064/2014-15 dated December 22 2014. Report should be determined by them by taking into account of bills purchased discounted... Render it as restructured account /Term Lending institutions ( TLIs ) purchasing/ selling non ­performing assets have advised... Repayment by the CDR Empowered Group and CDR Cell in all respects, they attract. Recoveries made in such a case, the Joint lenders ’ books, the provisioning requirement appropriate its. Under three categories viz 2 ) of the Central/State Government/Project authorities/Local authorities, if asset classification rbi is... Its role will be eligible for restructuring under consideration especially CDR accounts not later end-September.

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