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Tuesday, Jul 05, 2005

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RBI relaxes NPA norms for urban co-op banks

Our Bureau

Mumbai , July 4

URBAN co-operative banks (UCBs) will be allowed to apply the 180-day delinquency norm till March 31, 2006 for identification of NPAs in gold loans and small loans up to Rs 1 lakh, the Reserve Bank of India said in a release.

This move by the RBI is expected to give some relief to UCBs, which were required to move over to the 90-day delinquency norm for asset classification from the fiscal ended March 2004.

The RBI has also decided to permit unit banks (single-branch banks) and multi-branch banks operating within a single district having deposits up to Rs 100 crore to classify NPAs based on 180-day delinquency norm instead of the existing norm of 90 days.

This relaxation will be in force for three years up to March 31, 2007. It will give relief to small banks in provisioning requirement with retrospective effect, that is, from the fiscal ended March 2005 and enable them to transit to the 90-day norm in a calibrated manner by the end of three years, the release added.

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