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ARTICLE · 19 NOVEMBER 2021

Clarifications Regarding IRAC Norms

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Reserve Bank of India has issued clarifications on prudential norms on income recognition, asset classification and provisioning pertaining to advances.

IndiaFinance and Banking
Ankit Sinha
Ankit Sinha
Saurabh Sharma
Saurabh Sharma
Rupul Jhanjee
Rupul Jhanjee
Teza Jose
Teza Jose

Reserve Bank of India has issued clarifications on prudential norms on income recognition, asset classification and provisioning pertaining to advances.

Key clarifications:

A. Specification of due date/repayment date:

The loan agreements shall mention the exact due dates for repayment, break-up between principal and interest, examples of SMA/NPA classification, and the commencement of repayment date in case of moratorium (if any). In respect of fresh loans, the instructions shall be complied not later than December 31, 2021. In case of existing loans, compliance to these instructions shall be ensured on renewal/review.

B. Classification as Special Mention Account (SMA) and Non-Performing Asset (NPA)

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