MANU/RMIC/0046/2017

Ministry : Reserve Bank of India

Department/Board : Department of Banking Regulation

Circular No. : DBR.BP.BC.No.63/21.04.018/2016-2017
                   RBI/2016-2017/283

Date : 18.04.2017

Notification/ Circulars Referred : DBR.BP.BC No.23 /21.04.018/2015-16 dated July 1, 2015 MANU/RMIC/0305/2015

Citing Reference:
DBR.BP.BC No.23 /21.04.018/2015-16 dated July 1, 2015 MANU/RMIC/0305/2015  Referred

All Commercial Banks
(Excluding Regional Rural Banks)

Madam/Dear Sir,

Disclosure in the "Notes to Accounts" to the Financial Statements- Divergence in the asset classification and provisioning

Please refer to paragraph 22 of the Fourth Bi-monthly Monetary Policy Statement, 2015-16 announced on September 29, 2015 on the captioned subject (extract enclosed).

2. The Reserve Bank of India (RBI) assesses compliance by banks with extant prudential norms on income recognition, asset classification and provisioning (IRACP) as part of its supervisory processes. There have been instances of material divergences in banks' asset classification and provisioning from the RBI norms, thereby leading to the published financial statements not depicting a true and fair view of the financial position of the bank.

3. In order to ensure greater transparency and promote better discipline with respect to compliance with IRACP norms, it has been decided that banks shall make suitable disclosures as per Annex, wherever either (a) the additional provisioning requirements assessed by RBI exceed 15 percent of the published net profits after tax for the reference period or (b) the additional Gross NPAs identified by RBI exceed 15 percent of the published incremental Gross NPAs¹ for the reference period, or both.

4. The disclosures, as above, shall be made in the Notes to Accounts in the ensuing Annual Financial Statements published immediately following communication of such divergence by RBI to the bank.

5. The disclosures in the Notes to Accounts t........