RBI’s Loan Loss Provision Framework

On 16th January, 2023, the Reserve Bank of India published a discussion paper on “loan loss provision”, proposing a framework for adopting an expected loss (EL)-based approach for provisioning by banks in case of loan defaults.

The RBI’s proposal is based on the premise that the present “incurred loss”-based approach for provision by banks is inadequate, and there is a need to shift to the “expected credit loss” regime in order to avoid any systemic issues.

About Loan Loss Provision

  • The RBI defines a loan loss provision as an expense that banks set aside for defaulted loans.
  • Banks set aside a portion ....
Do You Want to Read More?
Subscribe Now
To get access to detailed content
Buy March 2023 Issue

Already a Member? Login here

Take Annual Subscription and get the following Advantage
The annual members of the Civil Services Chronicle can read the monthly content of the magazine as well as the Chronicle magazine archives.
Readers can study all the material before the last six months of the Civil Services Chronicle monthly issue in the form of Chronicle magazine archives.
Be an Annual Subscriber

Related Content