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Bond loss: RBI eases provisioning norms
Context
The Reserve Bank of India (RBI) has decided to ease the provisioning norms for bond losses for third and fourth quarters of 2017-18
Backdrop
Rising bond yields
What has happened?
RBI has now allowed banks to spread bond losses, incurred in 3rd and 4th quarters, over four quarters subject to certain terms
Terms by RBI
The RBI has set certain terms
- Banks that use the option must make suitable disclosures in their notes to accounts/quarterly results providing details of the provisions for depreciation of the investment portfolio for the quarters ended December 2017 and March 2018 made during the quarter/year and the balance required to be made in the remaining quarters
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