Fresh Stress

Banks face more pain as RBI seeks higher provisioning for even standard assets in stressed sectors.

- Anand Adhikari

 

 

The Reserve Bank of India, or RBI, has told banks to do higher provisioning than the regulatory minimum for even standard assets, or good companies, in stressed sectors. The higher provisioning for standard assets, that is, companies that are paying interest and principal regularly, will cover sectors such as infrastructure, power, metals, and telecom.

The RBI has, in fact, named telecom as one of the sectors for which banks should consider higher provisioning for standard assets by June 2017. Banks have a ₹82,200 crore exposure to the sector. At present, the provisioning for standard assets in these sectors is 0.40-1 per cent, both in corporate and retail segments.