Context
As per the press release by the Reserve Bank of India (RBI), it announced to form a working group for recommendations on provisioning by banks based on the Expected credit loss (ECL) framework.
What is Expected credit loss (ECL) based provisioning?
About the announcement:
Currently, the banks provide it after a borrower fails to repay the loan for over 90 days. |
RBI had ordered to all Banks, that ECL-based provisioning would be introduced during 2023–24 as part of its efforts to bolster the bad loan resolution system. |
What are Non-Performing assets (NPAs)?
When a loan is classified as NPA?
Why is there a need to recognise NPAs?
What process does a bank undertake to recover NPA?
Impact of NPAs on Financial Operations
Verifying, please be patient.