MUMBAI (Reuters) - The Reserve Bank of India (RBI) tightened manners on Thursday ruling how banks and other financial institutions ability for restructured loans, formed on the recommendations of a panel.
The RBI mentioned the amount lenders contingency set in reserve against promising losses on new loans would way up to 5 percent with outcome from April 1, 2013. It had already increased the provisioning necessity to 2.75 percent final year.
The amount lenders contingency set in reserve for loans that have already been restructured will way up to 3.75 percent from Mar 31, 2014 and then to 5 percent with outcome from Mar 31, 2015, the RBI mentioned in a statement.
The middle bank moreover mentioned that with outcome from April 1, 2015, restructured accounts would be right away personal as sub-standard.
Non-performing properties that have been restructured will go on to have the same item categorization as previous to restructuring, it said.
The RBI set up a working organisation early in 2012 to examination its discipline on restructuring of loans by banks and financial institutions and indicate changes receiving in to account the most appropriate general practices and accounting standards.
It reported in July and the middle bank initial carried provisioning amounts in line with its recommendations in November.
With mercantile expansion in India negligence and a few companies saying pressure on their income and margins, there are taking flight concerns about item high quality at India's banks.
India's GDP expansion is on follow for its worst year in a decade, and not long ago the RBI lowered its expansion predict is to fiscal year finale in Mar to 5.5 percent from 5.8 percent earlier.
(Reporting by Shamik Paul; Editing by Catherine Evans)