Banks lack information to maneuver to new NPA framework – Instances of India

Mumbai: Indian banks lack information to adapt mortgage provisioning practices to adjust to rbi‘s proposed new NPA provisioning framework. The framework, ‘anticipated credit score loss’ (ECL), goals to align Indian banks’ accounting practices with international requirements regarding E.C.L. earlier than it is categorised as default.
As per a survey by FICCI and the Indian Banks’ Affiliation, sure information factors required for ECL modeling and computation are usually not captured in banks’ methods.”Ahead-looking mortgage loss provisioning wants correct information. For instance, for computing the loss given default primarily based on superior inner rating-based strategy, the minimal information statement interval is at the least one full financial cycle ie, seven years,” the survey stated.