RBI Policy
Banks well prepared for expected credit loss norms, says Murmu
This story was originally published at 15:28 IST on 7 October 2026
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--RBI Murmu: Banks well prepared for expected credit loss norms
--RBI Murmu: Expect smooth transition to expected credit loss norms
MUMBAI – Indian banks are well prepared for the implementation of the expected credit loss framework and the transition to the new norms is expected to be smooth, Reserve Bank of India Deputy Governor Shirish Chandra Murmu said at the post-policy press conference on Wednesday. The RBI released norms to transition to a forward-looking expected credit loss framework by Apr. 1, 2027, moving away from the current incurred-loss provisioning system. This will mandate banks to set aside more funds for potential bad loans on implementation.
He said the RBI has been in touch with banks on the implementation and addresses issues raised by lenders during its interactions with them. "Our assessment is the transition will be smooth. We don't feel that there will be any issue," Murmu said.
He added that the RBI had conducted back-testing when the framework was introduced and was continuing to monitor banks' preparedness. The central bank is also conducting workshops to clarify the framework and provide hand-holding to lenders during the transition.
The RBI's Monetary Policy Committee Wednesday raised the policy repo rate for the first time in over three years by 25 basis points to 5.50%. It also decided to change its stance to 'calibrated tightening'. End
US$1 = INR 96.76
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Reported by Kabir Sharma
Edited by Avishek Dutta
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