SEBI modifies Circular on disclosure of divergence in the asset classification and provisioning by banks

Jul 19, 2019 | by Avantis RegTech Legal Research Team


The Securities and Exchange Board of India (SEBI) on July 17, 2019, has issued a Circular in order to modify the Circular No. SEBI/CIR/CFD/CMD/80/2017 dated July 18, 2017 on “Disclosure of divergence in the asset classification and provisioning by banks” which specified that banks which have listed specified securities shall disclose to the stock exchanges, divergences in the asset classification and provisioning wherever the additional provisioning requirements assessed by RBI or the additional Gross NPAs identified by RBI exceeded a certain threshold.

The Reserve Bank of India (RBI) had modified the disclosure requirements varying the aforesaid thresholds, vide its Notification No. RBI/2018-19/157; DBR.BP.BC.No.32/21.04.018/2018-19 dated April 01, 2019.

In line with the revised RBI requirements, all banks which have listed specified securities shall disclose to the stock exchanges divergences in the asset classification and provisioning, if either or both of the following conditions are satisfied:

a) the additional provisioning for NPAs assessed by RBI exceeds 10 percent of the reported profit before provisions and contingencies for the reference period, and 

b) the additional Gross NPAs identified by RBI exceed 15 percent of the published incremental Gross NPAs for the reference period.

The Stock Exchanges are advised to bring the provisions of this circular to the notice of banks which have listed specified securities and to disseminate the same on their websites. This circular shall come into force with immediate effect.

[Circular No. CIR/CFD/CMD1/ 79 /2019]


Bookmark

Related Updates



Alternate Text

Get updates on the go on RuleZbook Mobile App.