RBI tweaks bad loans divergence norms

The Reserve Bank of India (RBI) said on Monday banks should disclose bad loan divergences if the additional provisioning has exceeded 10 percent of the company’s profit before provision and contingencies.

The central bank altered the additional provisioning requirements, which previously stated that banks should disclose divergences if the provisioning has exceeded 15 percent of net profit after tax.

However, the RBI did not change any rules that permit lenders to reveal divergences if the additional gross non-performing asset (NPA) exceeded 15 percent of the reported incremental gross NPAs.