8/7/2019 NPA Provisioning Secured Asset
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Annex 4
Deviations in extant Prudential Norms as applicable
to Tier I and Tier II banks
(Vide para 2.1.4)
Tier I bank Tier II bank
Definition (i) Banks having deposits belowRs.100 crore,
operating in a singledistrict.
ii) Banks with deposits below Rs.100crore operating in more than
onedistrict, provided the branches are incontiguous districts and
depositsand advances of branches in onedistrict separately
constitute at least95% of the total deposits andadvances
respectively of the bank.
iii) Banks with deposits below Rs.100crore, whose branches
wereoriginally in a single district butsubsequently, became
multi-districtdue to reorganization of the district.
The deposits and advances asreferred to in the definition may
bereckoned as on 31st March of theimmediate preceding financial
year.
Bank which is not a Tier I bank.
NPAnorm 180 days loan delinquency norm forloan (including gold
loans and smallloan upto Rs 1 lakh). This relaxation isupto March
31, 2009.
90 days loan delinquency norm forloan accounts including gold
loansand small loans up to Rs. 1 lakh.
AssetClassificationnorm.
With effect from March 31, 2005, anasset is required to be
classified asdoubtful, if it has remained NPA formore than 12
months. However, forTier I banks, the 12-month period
forclassification of a substandard assetin doubtful category will
be effective
from April 1, 2009
With effect from March 31, 2005,an asset is required to
beclassified as doubtful, if it hasremained NPA for more than
12months.
Provisioning Norm.
(i) Standard Assets: 0.25 % for alltype of standard
advances.
(ii) Sub standard- 10%
(iii) Doubtful (up to one year):100%of unsecured portion plus
20% ofsecured portion
(i) Standard Asset: 0.40 per cent.For agricultural and SME
sectors itis 0.25 per cent.
ii) Sub standard- 10%
(iii) Doubtful (up to oneyear):100% of unsecured portionplus 20%
of secured portion
