Revised norms under four-tiered regulatory framework for provisioning for standard assets by primary (Urban) co-operative banks

RBI vide circular dated April 24, 2023 has issued revised norms under four-tiered regulatory framework for provisioning for standard assets by primary (Urban) co-operative banks. It has been decided to harmonize the provisioning norms for standard assets applicable to all categories of UCBs, irrespective of their Tier in the revised framework.

The standard asset provisioning norms applicable to Tier I, Tier 2, Tier 3 and Tier 4 UCBs under the revised framework shall be as under:

1. Direct advances to agriculture and SME sectors which are standard, shall attract a uniform provisioning requirement of 0.25 percent of the funded outstanding on a portfolio basis.
2. Advances to commercial real estate (CRE) sector which are standard shall attract a uniform provisioning requirement of 1.00 percent of the funded outstanding on a portfolio basis.
3. For advances to commercial real estate – residential housing (CRE-RH) sector, which are standard, the provisioning requirement shall be 0.75 percent.
4. For all other advances, banks shall maintain a uniform general standard asset provision of a minimum of 0.40 percent of the funded outstanding on a portfolio basis.