National
RBI allows banks to spread bond loss provisioning over 4 quarters
Mumbai, April 2 (IANS) The Reserve Bank of India (RBI) on Monday eased the provisioning norms for bond losses incurred by banks in the third and fourth quarter of 2017-18, allowing them to spread these over four quarters.
In a notification, the RBI also asked commercial banks to create an Investment Fluctuation Reserve (IFR) so as to build up adequate reserves as protection against increase in yields in future
“It has been decided to allow banks the option to spread provisioning for mark-to-market (MTM) losses on investments held in AFS (available for sale) and HFT (held for trading) for the quarters ended December 31, 2017 and March 31, 2018.
“The provisioning for each of these quarters may be spread equally over up to four quarters, commencing with the quarter in which the loss is incurred,” the notification said.
The RBI said this relaxation is being made “with a view to addressing the systemic impact of sharp increase in the yields on Government securities (G-Secs)”, but however, placed certain conditions for banks that utlise the option to spread the provisioning for these two quarters.
The banks have been asked to “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”.
Yields had risen 67 basis points in the quarter ended December 2017, pullin down bond prices as a result.
Further, with a view to building adequate reserves to protect against increase in yields in future, the regulator asked all banks to create an IFR with effect from fiscal 2018-19.
“An amount not less than the lower of the net profit on sale of investments during the year and net profit for the year less mandatory appropriations shall be transferred to the IFR, until the amount of IFR is at least 2 per cent of the HFT and AFS portfolio on a continuing basis.
“Where feasible, this should be achieved within a period of 3 years,” the RBI said.
“A bank may, at its discretion, draw down the balance available in IFR in excess of 2 per cent of its HFT and AFS portfolio, for credit to the balance of profit/loss as disclosed in the profit and loss account at the end of any accounting year,” it added.
The central bank also said that IFR shall be eligible for inclusion in Tier-2 capital – the secondary, or supplementary, component of bank capital, which in addition to Tier 1 makes up a bank’s required reserves.
The RBI’s latest move is designed to mitigate banks’ losses and help boost their fourth quarter profitability, which has been majorly impacted by the non-performing assets (NPAs), or bad loans, accumulated in the system and have crossed the staggering level of Rs 9 lakh crore.
–IANS
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Lucknow: Vishal Singh, a renowned social worker from Lucknow, also known as Foodman, has once again made India proud. He was honored by the Happy Hands Gloves Cooperative Limited Company in Korathai, Thailand, for his work with the Hunger Free World Mission.
The Hunger Free World Mission’s meeting was held in Korathai, Thailand, under Vishal Singh’s leadership. Representatives from several countries, including Mr. Raja Dwivedi (Managing Director of Happy Hands Gloves Limited), Thailand Coordinator Mr. Raja Mishra, and member Mr. Varun Singh, attended the event.
Under Vishal Singh’s leadership, the attendees took a pledge to work together toward creating a hunger-free world.
Speaking on the occasion, Vishal Singh explained that the main goal of the Hunger Free World Mission is social participation. He said the mission is not just about feeding people but also about meeting other basic needs of those who are struggling. The mission focuses on helping families of terminally ill patients in hospitals by providing food and shelter. It also works to fulfill essential needs like education, jobs, and care for the elderly.
For the last 16 years, the Vijay Sri Foundation has been providing free services, benefiting thousands of people. Vishal Singh highlighted that the mission aims to gain global recognition like other organizations such as WHO, WWF, and Red Cross, which work for social causes.
During this meeting, Vishal Singh was appointed as the Chairman of the Hunger Free World Mission by representatives from various countries. They also discussed holding regular meetings in different countries to push the mission forward.
Business tycoon Dr. Abhishek Verma has also supported this humanitarian mission, vowing to promote the idea of “Seva Parmo Dharma” (Service is the highest duty) worldwide. Vishal Singh praised him, stating that people like Dr .Abhishek Verma inspire others to work for the betterment of society.
Recently, Romania’s Ambassador, Mr . Daniela Sezonov Ţane, invited Vishal Singh to the Romanian Embassy in Delhi, where they discussed the mission in detail. Impressed by his humanitarian work, she honored Vishal Singh and invited him to Romania to take the mission forward .
Food man Vishal Singh has been serving the people of India for the past 16 years. Through the Vijay Sri Foundation, he provides free meals to cancer patients & their families ,shelter, and education for women & children along with running free old-age homes in Lucknow.
In addition to his humanitarian work, Vishal Singh also addresses issues like crime and corruption through his role as Chairman of Seva Path Media and Managing Director of Vijay Sri Foundation.
During the COVID-19 pandemic, Vishal Singh and his team worked tirelessly to provide food and help to the needy, including starving children, elderly citizens, and pregnant women. Despite contracting the virus himself, he continued to assist others after his recovery. He even created a life-saving oxygen regulator using household items, which was praised by doctors both in India and abroad.
In his address at the meeting, Vishal Singh spoke about his mission to create a hunger-free world. He pointed out that India’s large population, along with issues like unemployment and poverty, has caused the country to fall on the Hunger Index. He urged people to contribute just one handful of grains daily to help create a hunger-free world.
He concluded by saying that through social participation, we can empower the people around us, meet their basic needs, and work together to build a stronger, more prosperous, and developed society.
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