What changed
From FY2014-15, banks must disclose sector-wise advances in 'Notes to Accounts' using a new format covering priority and non-priority sectors with sub-sectors where advances exceed 10% of that sector's total. This replaces the earlier disclosure requirements from the March 2010 circular on sector-wise NPAs.
What it means for you
Banks now need to provide granular data on advances and NPAs by sector, including sub-sectors like agriculture, industry, services, and personal loans. This enhances regulatory oversight and helps banks monitor concentration risks, especially in priority sector lending, aligning with the Nachiket Mor Committee's recommendations.
What you must do
- Update financial statement templates to include the new sector-wise disclosure format from FY2014-15 onwards.
- Ensure systems can capture and report outstanding advances and gross NPAs for each sector and sub-sector as specified.
- Identify sub-sectors where advances exceed 10% of the sector total and prepare separate disclosure lines for them.
- Train finance and compliance teams on the new disclosure requirements and the replacement of the 2010 circular's norms.
Who it affects
All commercial banks (excluding RRBs), Finance and compliance departments, Auditors and financial reporting teams
What sectors are covered in the new disclosure format?
The format covers Priority Sector (agriculture, industries eligible as priority sector, services, personal loans) and Non-Priority Sector (agriculture, industry, services, personal loans). Sub-sectors with advances over 10% of the sector total must be disclosed separately.
Does this circular replace any previous disclosure requirements?
Yes, it replaces the sector-wise NPA disclosure requirements from the March 15, 2010 circular (DBOD.BP.BC.No.79/21.04.018/2009-10) with the new format specified in the annex.
When do these new disclosure requirements take effect?
They are applicable from the financial year 2014-15 onwards, meaning banks must include the new disclosures in their financial statements for that year.