Business Standard

RBI's June 7 circular on stressed assets may keep banks' provisions high

Recognition of stress in itself may result in higher provisioning

rbi, reserve bank of india
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Hamsini Karthik
With the June quarter earnings season getting underway next week, hopes are high from the banking sector, which has until now given the maximum impetus to earnings growth. While the sector may continue to perform well, provisioning is worrying investors. From a high base of FY18 and FY19, FY20 is expected to be incrementally better. 

However, concerns arise after the revised circular on the treatment of stressed assets issued on June 7, 2019, by the Reserve Bank of India (RBI). While the new norms aren’t as exacting as the February 12 circular, it puts the onus on banks to kick-start resolution

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