Provisioning norms on restructured advances
Normal provisions
(i) Banks will hold provision against the restructured advances as per the extant provisioning norms.
(ii) Restructured accounts classified as standard advances will attract a higher provision (as prescribed from time to time) in the first two years from the date of restructuring. In cases of moratorium on payment of interest/principal after restructuring, such advances will attract the prescribed higher provision for the period covering moratorium and two years thereafter.
(iii) Restructured accounts classified as non-performing advances, when upgraded to standard category will attract a higher provision (as prescribed from time to time) in the first year from the date of upgradation.
(iv) The above-mentioned higher provision on restructured standard advances (2.75 per cent as prescribed vide circular dated November 26, 2012) would increase to 5 per cent in respect of new restructured standard accounts (flow) with effect from June 1, 2013 and increase in a phased manner for the stock of restructured standard accounts as on May 31, 2013 as under :
3.50 per cent – with effect from March 31, 2014. (spread over the four quarters of 2013-14)
4.25 per cent – with effect from March 31, 2015. (spread over the four quarters of 2014-15)
5.00 per cent – – with effect from March 31, 2016.(spread over the four quarters of 2015-16)