Industry associations have requested the RBI to have a relook at the requirements by Non-banking finance companies (NBFC) notified by the RBI on the norms of income recognition, asset classification, and provisioning for advances.
- The RBI has, however, not acceded to such requests, however, till now they are still hopeful of some relaxation.
What the RBI notification says?
- In November 2021, the RBI had clarified on prudential norms on income recognition, asset classification and provisioning pertaining to advances for all banks, NBFCs and all India financial institutions.
- It had said that NBFCs must recognise loans as NPAs if they are not serviced for over 90 days.
- The objective is to bring uniformity in the implementation of IRACP norms across all lending institutions. Further, upgradation of accounts classified as NPA needs to be done only when the entire arrears of interest and principal is paid by the borrower.
- Borrower accounts shall be flagged as overdue by the lending institutions as part of their dayend processes for the due date, irrespective of the time of running such processes.
- Classification of borrower accounts as SMA as well as NPA shall be done as part of dayend process.
GS TIMES UPSC PRELIMS & MAINS CURRENT AFFAIRS BASED BASICS DAILY ONLINE TEST CLICK HERE
CLICK HERE DAILY CURRENT AFFAIRS QUIZ FOR STATE CIVIL SERVICES
