What changed
This master circular supersedes the previous version dated October 1, 2021, consolidating all instructions issued up to March 31, 2022. It includes a new annex listing all circulars consolidated, ensuring banks have a single updated reference for IRAC norms. The structure remains largely unchanged, covering definitions, income recognition, asset classification, provisioning, and resolution frameworks.
What it means for you
Banks must align their internal policies and systems with the latest consolidated IRAC norms to ensure regulatory compliance. The circular reinforces objective income recognition based on recovery records and standardized asset classification criteria. Lenders should review their NPA management mechanisms and granular data reporting to meet supervisory expectations.
What you must do
- Replace the October 2021 master circular with this updated version as the primary reference for IRAC norms.
- Review and update internal policies on income recognition, asset classification, and provisioning to align with the consolidated instructions.
- Ensure NPA management mechanisms and granular data reporting systems are robust and compliant with Part A requirements.
- Train credit and risk teams on any changes in definitions or procedures, especially regarding stressed asset resolution and restructuring.
Who it affects
All commercial banks (excluding Regional Rural Banks), Credit and risk management departments, Compliance and audit teams, Loan officers handling NPA and restructuring
Does this master circular introduce any new IRAC norms?
No, it consolidates existing instructions issued up to March 31, 2022, without introducing new norms. It replaces the previous master circular dated October 1, 2021.
Which banks are covered under this circular?
All commercial banks except Regional Rural Banks (RRBs) are required to comply with these prudential norms.
What is the key change from the previous master circular?
The main change is the updated consolidation date (up to March 31, 2022) and the inclusion of a new annex listing all circulars consolidated. The core norms remain the same.