What is prudential norms RBI?

Narasimham), the Reserve Bank of India has introduced, in a phased manner, prudential norms for income recognition, asset classification and provisioning for the advances portfolio of the banks so as to move towards greater consistency and transparency in the published accounts.

What is prudential norm?

Prudential norms” are definitionally the guidelines and general norms issued by the regulating bank (the central bank) of the country for the proper and accountable functioning of bank and bank-like establishments. In other words, the norms are the practices that all banks are expected to follow.

Who introduced prudential norms?

Narasimham), the Reserve Bank of India has introduced, in a phased manner, prudential norms for income recognition, asset classification and provisioning for the advances portfolio of the banks so as to move towards greater consistency and transparency in the published accounts. 1.2.

What are the prudential norms for NBFC?

RBI announces prudential norms for dividends by NBFCs including housing finance companies. A dividend paying NBFC must have a net NPA ratio of less than 6 per cent in each of the last three years, including at the close of the financial year for which the dividend is proposed to be declared.

What is NPA as per RBI norms?

For the above category of banks, an account would be classified as Non Performing Asset if the : (i) Interest and/or installment of principal remain overdue for a period of more than 180 days in respect of a Term Loan. 4 Tier II banks shall classify their loan accounts as NPA as per 90 day norm as hitherto.

What do you mean by IRAC norms?

IRAC are rules that prescribe when a loan should be declared as a non-performing asset (NPA). Once a loan is an NPA, the RBI requires that any recovery should not be classified as income.

What are exposure norms?

Credit exposure to borrowers belonging to a group may exceed the exposure norm of 40 percent of the bank’s capital funds by an additional 10 percent (i.e., up to 50 percent), provided the additional credit exposure is on account of extension of credit to infrastructure projects.

Which of the following prudential norms is not applicable to NBFCs?

iii) Capital adequacy norms; CRR / SLR requirements; single and group borrower limits; prudential limits on capital market exposures; and the restrictions on investments in land and building and unquoted shares are not applicable to NBFCs – ND.

What is NPA RBI?

A ‘non-performing asset’ (NPA) was defined as a credit facility in respect of which the interest and/ or instalment of principal has remained ‘past due’ for a specified period of time. The specified period was reduced in a phased manner as under: Year ending March 31. Specified period. 1993.