The Reserve Bank of India (RBI) on April 24, 2023, revised the standard asset provisioning norms applicable to Tier I, Tier 2, Tier 3, and Tier 4 UCBs with reference to circular DOR.REG.No.84/07.01.000/2022-23 dated December 01, 2022.
The current standard assets provisioning norms for UCBs are consolidated in the Master Circular DOR.STR.REC.5/21.04.048/2022-23 dated April 01, 2022, is based on the earlier categorization of UCBs into Tier I and Tier II as defined in para 4 of circular UBD.CO.LS.Cir.No.66/07.01.000/2008-09 dated May 06, 2009.
The standard asset provisioning norms applicable to Tier I, Tier 2, Tier 3, and Tier 4 UCBs under the revised framework shall be as under:
• Direct advances to agriculture and SME sectors which are standard, shall attract a uniform provisioning requirement of 0.25 percent of the funded outstanding on a portfolio basis.
• Advances to the commercial real estate (CRE) sector which are standard shall attract a uniform provisioning requirement of 1.00 percent of the funded outstanding on a portfolio basis.
• For advances to the commercial real estate - residential housing (CRE-RH) sector, which are standard, the provisioning requirement shall be 0.75 percent.
• For all other advances, banks shall maintain a uniform general standard asset provision of a minimum of 0.40 percent of the funded outstanding on a portfolio basis.
These guidelines shall come into effect from the date of this circular. All other instructions stipulated in the Master Circular ibid remain unchanged.
[Notification No. RBI/2023-24/18 DOR.STR.REC.12/21.04.048/2023-24]
