PSBs ready ₹20K-cr war chest for ECL transition

PUBLIC SECTOR BANKS (PSBs) are readying a combined war chest of an estimated %20,000 crore in provisions as they prepare to transition to the Reserve Bank of India’s expected credit loss (ECL)- based provisioning framework from April 1, 2027.

- NARAYANAN V

Some lenders have already started front-loading provisions to cushion the impact of the new norms ahead of their rollout.

Punjab National Bank (expects an estimated %9,000crore hit. Most of this impact will stem from “Stage 2” assets — accounts showing elevated risk, but not yet in default — which could trim about 0.85 percentage points off its capital ratio, Reuters reported citing CEO Ashok Chandra.