“I think 50% is a very reasonable level of provisioning given as I said the historical record. More From Livemint »On 13 June, RBI advised banks to initiate the insolvency resolution process in select accounts under the provisions of the Insolvency and Bankruptcy Code (IBC). Subsequently, RBI advised banks to set aside 50% provisioning against secured exposure and 100% against unsecured exposure in all cases referred for bankruptcy. Bankers were expecting RBI to give forbearance on the provisioning requirement for eight quarters, Mint reported on 15 June. According to Acharya, in the past, banks have used schemes such as corporate debt restructuring or strategic debt restructuring to skip provisioning requirements rather than resolve stressed loans.

Source: Mint July 01, 2017 06:10 UTC