Income Recognition, Asset Classification, and Provisioning
The Reserve Bank of India (RBI) has issued a master circular for Urban Co-operative Banks (UCBs) on income recognition, asset classification, provisioning, and other related matters.
Non-Performing Assets (NPA)
The circular outlines the classification of assets as NPAs, including:
- Credit card accounts
- Agricultural advances
Assets should be identified as NPAs on an ongoing basis, and interest should be charged at monthly rests.
Special Mention Accounts (SMA)
The circular introduces SMA sub-categories based on the following criteria:
- Principal or interest payment or any other amount wholly or partially overdue for a specified period.
- Outstanding balance remains continuously in excess of the sanctioned limit or drawing power, whichever is lower, for a specified period.
Reporting of Large Exposures
UCBs are required to report large exposures to the Central Repository of Information on Large Credits (CRILC).
Chat with the Master Circular: