RBI vide circular dated June 28, 2022 has directed strict compliance with provisioning Requirement for Investment in Security Receipts (SRs) under Master Direction – Reserve Bank of India (Transfer of Loan Exposures) Directions, 2021. The master direction provides that difference between the carrying value of such SRs and the valuation arrived at as on the next financial reporting date after the date of issuance of MD-TLE, may be provided over a five-year period starting with the financial year ending March 31, 2022 – i.e. from FY2021-22 till FY 2025-26. All lending institutions shall put in place a board approved plan to ensure that the provisioning made in each of the financial years is not less than one fifth of the required provisioning on this count.
