What changed
This master circular replaces the July 2, 2012 version, incorporating all instructions issued up to June 30, 2013. It consolidates guidelines on NPA classification, provisioning rates, restructuring, and sale of financial assets to SCs/RCs.
What it means for you
Banks must align their internal policies with the updated norms for classifying assets as substandard, doubtful, or loss, and for provisioning accordingly. The circular also covers restructuring guidelines and sale of NPAs, impacting credit risk management and capital adequacy.
What you must do
- Update internal manuals and systems to reflect the consolidated norms as of June 30, 2013.
- Ensure NPA classification and provisioning comply with the revised definitions and timelines.
- Review restructuring and asset sale processes to align with the prudential guidelines in Part B.
- Train credit and risk teams on the updated asset classification and provisioning rules.
Who it affects
All commercial banks (excluding RRBs), Credit risk management teams, Loan operations and NPA management units, Internal audit and compliance departments
What is the effective date of this master circular?
The circular is dated July 1, 2013, and consolidates instructions issued up to June 30, 2013.
Does this circular apply to Regional Rural Banks?
No, the circular explicitly excludes RRBs from its scope.
Where can I find the detailed annexures and previous circulars referenced?
The master circular is available on RBI's website, and Annex 7 lists the circulars consolidated in this document.