Banks seek one more year to prepare for ECL reporting on stressed assets

Banking regulator has indicated five-year glide path for shift to new system

Banks have sought one more year from the Reserve Bank of India (RBI) to develop risk models, gather data and test before the Expected Credit Loss (ECL) regime for stressed asset provision begins on April 1, 2025.

Senior bank executives said technical capacity building will include systems and skills development. While internal work has begun on developing models with the help of experts, it is going to take more time for gathering data and assessing impact while transitioning from the Incurred Loss Approach banks use now.

Banks, given their robust bottom line, can absorb any financial burden for the transition to ECL