Tuesday, February 15, 2011

NBFCs PROVISIONING NORMS

The Reserve Bank of India has asked of the Non-Banking Financial (Deposit Accepting or Holding)
Companies, to make a general provision at 0.25% of the outstanding standard assets in a bid to
strengthen their balance-sheets. However, the provisions on standard assets should not be
reckoned for arriving at net NPAs. Also the provisions towards standard assets need not be
netted from gross advances but shown separately as 'contingent Provisions against Standard Assets'
in the balance sheet.

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