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Indian central bank tweaks bad loan divergence rule.

M2 EQUITYBITES-April 2, 2019--Indian central bank tweaks bad loan divergence rule

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Global Banking News - 02 April 2019

Indian central bank, RBI, has said that it has tweaked the bad loan divergence rule.

It is believed that the move will provide banks with a little more leeway in dealing with the apex bank's mandatory divergence rules. The disclosure of divergence practice, mandated by RBI, was aimed at improving transparency in asset classification and preventing under-reporting of bad loans.

In a statement, the central bank said, 'Some banks, on account of low or negative net profit, are required to disclose small divergences which is contrary to the regulatory intent that only material divergences should be disclosed.'

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Date:Apr 2, 2019
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