..........More importantly, the RBI panel suggested to do away with regulatory forbearance regarding asset classification and provisioning in two years. If indeed that happens, banks have to make provisions for anywhere between 5% and 15% for any loan the moment it gets restructured. Currently, banks need to make a 2% provision on standard assets that they restructure, and a provision of up to 15% if the restructured loans turn bad. The provision requirement on restructured accounts should be increased to 5%, the panel said. RBI has sought feedback to the Mahapatra panel proposals until 21 August.......
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