RBI's Revised Guidelines on BDDR and NPAs for Cooperative Banks
| Aspect | Details |
|---|---|
| Organisation | Reserve Bank of India (RBI) |
| Subject | Revised Instructions for Bad and Doubtful Debt Reserve (BDDR) |
| Applicability | Urban Co-operative Banks, State Cooperative Banks, Central Co-operative Banks |
| Effective Date | Immediately |
| Key Change | Uniformity in accounting and prudential treatment of NPAs |
| Expense Recognition | Provisions for NPAs to be charged as an expense in P&L account from FY25 |
| Regulatory Capital | Existing capital adequacy norms to continue |
| Transition Measure | One-time transition measure introduced |
| Identification & Quantification | Identify and quantify BDDR balances as of March 31, 2024 |
| Reallocation of Provisions | Provisions to be appropriated from P&L Account or General Reserves by March 31, 2025 |
| Excess BDDR Balances | Can be transferred to General Reserves or P&L Account |
| Capital Treatment | Adjusted BDDR balances can be considered as Tier 1 capital |
| Non-Reduction from NPAs | BDDR balances should not reduce Gross NPAs for calculating Net NPAs |