Disclosure Norms for Financial Institutions
The Reserve Bank of India has issued guidelines on disclosure requirements for financial institutions.
The guidelines cover five key areas:
Capital: Disclosure of capital structure, capital adequacy ratio, and tier 1 and tier 2 capital.
Asset Quality and Credit Concentration: Disclosure of asset quality, credit concentration, and provisioning for non-performing assets.
The asset quality disclosure includes:
| Items | Less than or equal to 1 year | More than a year up to 3 years | More than 3 years up to 5 years | More than 5 years up to 7 years | More than 7 years | Total |
Liquidity: Disclosure of liquidity position, including cash and cash equivalents, and liquidity coverage ratio.
Operating Results: Disclosure of operating income, operating expenses, and profit/loss.
Movement in Provisions: Disclosure of provisions for non-performing assets, depreciation in investments, and restructured accounts.
The provisions for non-performing assets include:
- Provisions for non-performing assets (comprising loans, bonds, and debentures in the nature of advances and inter-corporate deposits)
- Provisions for depreciation in investments
The guidelines aim to enhance transparency and accountability in financial institutions.
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Download: Master Circular – Disclosure Norms for Financial Institutions