Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: due date for vat payment :: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4% :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: form 3cd :: cpt :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: articles on VAT and GST in India :: VAT RATES :: TDS :: empanelment :: ACCOUNTING STANDARD :: ARTICLES ON INPUT TAX CREDIT IN VAT
 
 
« Latest Circulars »
 RBI Working Paper Series No. 5/2017: Comparison of Consumer and Wholesale Prices Indices in India: An Analysis of Properties and Sources of Divergence
 All Agency Banks and select offices of RBI to remain open on all days from March 25, 2017 to April 1, 2017
 RBI-Sources of Variation in Foreign Exchange Reserves in India during April-December 2016
 Developments in India’s Balance of Payments during the Third Quarter (October-December) of 2016-17
 RBI signs Memorandum of Understanding(MoU) on “Supervisory Cooperation and Exchange of Supervisory Information” with the Bank of Thailand
 RBI-Meeting Schedule of the Monetary Policy Committee for 2017-18
 RBI to conduct Overnight, 7 day and 14 day Variable rate Reverse Repo auctions under LAF on March 22, 2017
 Risk Management and Inter-bank Dealings: Operational flexibility for Indian subsidiaries of Non-resident Companies
 Master Directions on Issuance and Operation of Prepaid Payment Instruments in India
 RBI seeks comments on draft circular on Master Directions on Issuance and Operation of Pre-paid Payment Instruments (PPIs) in India
  Annual Closing of Government Accounts – Transactions of Central / State Governments – Special Measures for the Current Financial Year (2016-17)

RBI-Utilisation of Floating Provisions/Counter Cyclical Provisioning Buffer
February, 11th 2014

RBI/2013-14/485
DBOD.No.BP.95/21.04.048/2013-14

February 7, 2014

The Chairman and Managing Director/Chief Executive Officer
All Scheduled Commercial Banks
(Excluding Local Area Banks and Regional Rural Banks)

Dear Sir,

Utilisation of Floating Provisions/Counter Cyclical Provisioning Buffer

Please refer to our circular DBOD.No.BP.BC.89/21.04.048/2005-06 dated June 22, 2006 and DBOD.No.BP.BC. 68/21.04.048/2006-07 dated March 13, 2007 on creation, accounting, disclosures and utilisation of floating provisions by banks. Banks may also refer to our circular No.DBOD.No.BP.BC.87/21.04.048/2010-11 dated April 21, 2011 on creation and utilisation of ‘countercyclical provisioning buffer’, wherein we had advised that this buffer will be allowed to be used by banks for making specific provisions for non-performing assets, inter alia, during periods of system wide downturn, with the prior approval of RBI.

2. Accordingly, it has been decided, as a countercyclical measure, that banks may utilise upto 33 per cent of countercyclical provisioning buffer/floating provisions held by them as on March 31, 2013, for making specific provisions for non-performing assets, as per the policy approved by their Board of Directors.

3. Utilisation of countercyclical provisioning buffer/floating provisions under this measure may be over and above the utilisation of countercyclical provisioning buffer/floating provisions for the purpose of making accelerated/additional provisions as proposed in the Reserve Bank’s Press Release dated January 30, 2014 on “Early Recognition of Financial Distress, Prompt Steps for Resolution and Fair Recovery for Lenders: Framework for Revitalising Distressed Assets in the Economy”.

4. In this connection, banks may also refer to the Discussion Paper on Introduction of Dynamic Loan Loss Provisioning Framework for Banks in India dated March 30, 2012, wherein banks are required to build up ‘Dynamic Provisioning Account’ during good times and utilise the same during downturn. Under the proposed framework, banks are expected to either compute parameters such as probability of default, loss given default, etc. for different asset classes to arrive at long term average annual expected loss or use the standardised parameters prescribed by Reserve Bank of India towards computation of Dynamic Provisioning requirement. Dynamic loan loss provisioning framework is expected to be in place with improvement in the system. Meanwhile, banks should develop necessary capabilities to compute their long term average annual expected loss for different asset classes, for switching over to the dynamic provisioning framework.

Yours faithfully,

(Chandan Sinha)
Principal Chief General Manager

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - We Bring IT. Offshore software outsourcing company. We use Global Delivery Model (GDM) and believe in Follow The Sun principle

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions