So, why don’t you think Dynamic provisioning norms will hurt banks?




It is just a proposal at this juncture but we would be pushing as many good bankers for the provisions on standard assets to be adopted so the NPAs can be taken out of this subset of provisions and expensed off at least. As of now the proposal is still raw in its details requiring banks to keep additionl provisions including for foreign branches which are still leveraged on structured plays for each loan\


Current proposals start off with introducing provisioning on restructured loans specifying that such restructurings should have more skin from the promoters, lessening pressure on banks from the bankrupt promoters and adding a possibility of debt recovery before preference share conversion is forced and then giving it to years before adding specific provisions to that. This is overall a discipline that may be disavoed only by a fe Public sector banks depending on their portfolios





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