MUMBAI, FEB. 3: Banking sector’s provisioning requirement would increase by Rs 15,000 crore between April 2013 and March 2015 if the Reserve Bank of India implements its draft guidelines on restructuring of advances in the current form, said Crisil. Consequently, banks’ profits could be lower by around 7 per cent in this period.
The credit rating agency termed the withdrawal of regulatory forbearance for restructured loans and the tightening of the process of restructuring as positives. “These stipulations will enhance the confidence of stakeholders in banks’ asset quality and discourage large-scale restructuring activity,” said Crisil.
Pointing out that cumulative loan restructuring will reach Rs 3.25-lakh crore by March 2013, the rating agency said the revised guidelines will result in a Rs 15,000-crore increase in the provisioning costs for banks over the next two years.
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