The Reserve Bank of India on 5th May 2021 has allowed banks to utilise 100 per cent of floating provisions or countercyclical provisioning buffer held by them as on December 31, 2020 for making specific provisions for non-performing assets.
Earlier banks were allowed to utilize up to 33 per cent and 50 per cent of floating provisions/ countercyclical provisioning buffer held by them as on March 31, 2013 and December 31, 2014 respectively, for making specific provisions for non-performing assets, as per their Board approved policy.
However, in order to mitigate the adverse impact of COVID 19 related stress on banks, as a measure to enable capital conservation, it has been decided to allow banks to utilise 100 percent of floating provisions/ counter-cyclical provisioning buffer held by them as on December 31, 2020 for making specific provisions for non-performing assets with prior approval of their Boards. Such utilization is permitted with immediate effect and upto March 31, 2022.
