BUSINESS LINE : The Reserve Bank of India could consider approving bankers’ request to lower the provisioning requirement on stage-2 loans to 1-3 per cent from proposed 5 per cent under the draft expected credit loss (ECL) guidelines, sources say.
Ask Anything, Know Better
October 24
October 09 What is ECL? The Expected Credit Loss (ECL) framework is a new rule from the Reserve Bank of India (RBI) for banks to handle bad loans better. It helps banks guess and set aside money for loans that might go wrong in the future. RBI put out a draft of these rules on October 7, 2025. This changes the old way where banks only saved money after a loan actually became bad. It's like planning ahead instead of reacting later. The new system starts from April 1, 2027, and banks have five years to fully adjust. Why...
September 24 What Are Unclaimed Bank Deposits? Unclaimed deposits are balances lying in savings accounts, fixed deposits, recurring deposits, or other bank accounts that have had no customer activity for 10 years or more. After this period, banks are required to transfer these amounts to the Depositor Education and Awareness Fund (DEAF), maintained by the Reserve Bank of India (RBI). Importantly, these deposits are not forfeited. Depositors or their legal heirs can still claim the money at any time through the bank, which then seeks...
August 29 WHAT? Consumer confidence is an economic indicator that gauges how optimistic or pessimistic consumers feel about the economy and their personal financial situation. RBI's Consumer Confidence Survey (CCS) is conducted bi-monthly. RBI’s CCS assesses perceptions and outlook on key economic parameters such as the general economic situation, employment, income, prices, and spending behavior. It produces two key indices: Current Situation Index (CSI) – Measures consumer sentiment about the...
August 25 CONTEXT Banks like Bank of India, SBI and Canara Bank have classified the loan accounts of Reliance Communications (RCom) and it’s promoter Anil Ambani as fraud for a ₹3,000 crore loan fraud case involving SBI. The fraud tag blacklists them across the banking system, severely restricting future borrowing and inviting further legal scrutiny. It could lead to asset seizures, penalties, or imprisonment if criminal charges are upheld. But when does a Bank classify a borrower as a...
August 16 WHAT? The Reserve Bank of India (RBI) has announced a new mechanism to expedite cheque clearing, effective October 4, 2025, reducing the clearance time from the current T+1 days (up to two working days) to a few hours. The Cheque Truncation System (CTS) will transition from batch processing to continuous clearing with on-realisation-settlement, improving efficiency, reducing settlement risks, and enhancing customer experience. Implementation Phases Phase 1 (October 4, 2025 – January 2, 2026):...
July 23 WHAT? The Reserve Bank of India (RBI) publishes the Financial Inclusion Index (FI-Index) annually to measure the extent of financial inclusion across India. Financial inclusion means including more and more people in the formal banking network. The FI-Index is a comprehensive metric that quantifies financial inclusion on a scale from 0 (complete financial exclusion) to 100 (full financial inclusion). It incorporates 97 indicators across banking, investments, insurance, postal, and pension sectors, developed in...
July 02 WHAT? Gross Non-Performing Assets (Gross NPA) and Net Non-Performing Assets (Net NPA) are key indicators of the health of a bank's loan portfolio in India, reflecting the level of bad loans or assets that have stopped generating income. Gross NPA Banks extend loans to the borrowers and since these loans earns interest for the banks, they are considered Bank Assets. Banks expect a return on these assets like interest income. But if the borrower doesnt pay it's due principal or interest or both on...
June 17 WHAT? The Indian government is accelerating its disinvestment drive by planning to sell up to 20% stake in five public sector banks (PSBs) within the next six months, utilizing Qualified Institutional Placement (QIP) and Offer for Sale (OFS) routes. This move aims to raise capital, improve bank governance, and ensure compliance with the Securities and Exchange Board of India’s (SEBI) minimum public shareholding (MPS) norm of 25%. The initiative is part of a broader strategy to strengthen the financial health of...
June 13 SUMMARY The Reserve Bank of India (RBI) issued new directives on June 12, 2025, to simplify the Know Your Customer (KYC) process, as reported by Business Standard. Key points Mandatory Notifications: Banks must send at least three advance written reminders before the KYC update deadline and three additional reminders, including one physical letter, if the update is not completed post-deadline. These must include clear instructions, support channels, and consequences of non-compliance. Banks are...
Comments
Write Comment